Is Visteon Really An Upgrade? Barclays Thinks So; Here's Why

Shares of Visteon Corp

are up more than 4 percent on Wednesday afternoon, after Barclays analyst Brian A. Johnson upgraded the stock's rating from Equalweight to Overweight. The specialist also boosted his price target from $107 to $121, and his EPS estimates for fiscal 2015 and fiscal 2016, from $4.50 to $4.53, and from $5.77 to $5.87, respectively. The rating upgrade came after the analyst revisited Visteon's exposure to the "Connected Car arms race," which Barclays expects "will drive outsized organic revenue and earnings growth with potential for acceleration in new business wins and better-than-expected margin expansion." With the stock trading at $98 per share (at the time the report was produced), Barclays sees the stock offering a favorable risk/reward profile. They think the "newfound" pure-play auto electronics company is becoming alluring, and has a clear catalyst in sight. "In a space starved of catalyst-driven stories, and with the sale of HVCC expected in the coming weeks," the firm thinks "the strategic opportunity around the remaining VC business provides the best catalyst opportunity" amongst the companies they cover.