Evercore ISI analyst Chris McNally initiates coverage on Versigent Ltd. (NYSE: VGNT) with a Outperform rating and a price target of $55.00.

The analyst comments "PM Summary – Versigent (former APTV “EDS” division) was spun/separated from the parent (April 1st) while initial distribution has certainly been harsher than we had previewed….calling on all Value/Spin Investing 101 students for why these “forced distribution/selling” opportunities perpetually reappear. We initiate Outperform ($55 target; +56% upside) based on the significant upside represented by the simple comp math of rerating to peers at ~7x ’27 EPS, 5.1x EV/EBITDA and/or ~9.0x FCF. We believe, over the next 12-18 months, VGNT, from its bottom ($27), will look eerily similar to the successful PHIN performance, post BWA spin (’23), which was >100% the following 24 months. Company Overview – Versigent designs & manufactures low voltage (“LV”) & high voltage (“HV”) electrical architectures/wiring which provide signal, power & data distribution for Auto & Industrial customers, the top 3 likely including GM, Ford, & Tesla. Rev growth will largely be production-based on low GoM (EVs; connected car) in the +1-2% range for total Rev growth targeted +3-4% CAGR through ’28. EBITDA margin upside guided +200bps expansion over that period. Mgmt includes CEO Joe Liotine (former EDS) & CFO Doug Ostermann (former STLA)."

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Shares of Versigent Ltd. closed at $34.77 yesterday.