FBR Capital Adds Visteon (VC) to Top Picks List, Lifts PT to $130

FBR Capital analyst Christopher Van Horn added Visteon (NYSE: VC) to the the FBR Top Picks and raised his price target to $130.00 (from $110.00)

Van Horn commented, "Given the continued focus by OEMs on both technology and fuel-efficiency gains, we have decided to place Visteon on the FBR Top Picks list given its leverage to both OEM production rates and the interior technology of a vehicle. We believe that innovation in the cockpit of a vehicle and further enhancing the user/driver experience will be a continued focus from the OEMs and suppliers leveraged to this trend. In our view, the company’s electronics portfolio is one of the most advanced and differentiated in the group and is adopted on a wide variety of platforms across the world. We think that the company is at an inflection point as it has essentially finalized its restructuring program highlighted two years ago, and industry fundamentals remain a tailwind to our investment thesis. Based on both our DCF and sum-of-the-parts valuations, we are increasing our price target from $110 to $130. On an EV/EBITDA basis, VC is currently trading at 5.5x 2015E adjusted EBITDA, which we think makes a solid entry point for the name. At 5.5x 2015E EBITDA, VC shares trade at a discount to the OEM suppliers peer group multiple of 6.8x. However, more importantly, compared with the interior technology–focused names, VC trades at an even larger discount to the group multiple of 10x."

For an analyst ratings summary and ratings history on Visteon click here. For more ratings news on Visteon click here.

Shares of Visteon closed at $103.08 yesterday.

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