$42.93
$149.99
bear $42.93
base $98.56
bull $149.99
margin of safety $50.00
market price* $87.25
Visteon designs and manufactures the electronics in a car's cockpit: digital instrument clusters, center and passenger displays, infotainment units, and SmartCore cockpit computers that run several of these functions on one chip. It supplies most large automakers, but its sales are concentrated and the concentration is rising: Ford took 26% of 2025 sales, up from 22% in 2023 and 23% in 2024, with General Motors at 12% and Volkswagen at 10%. Automakers order their requirements for particular vehicles with no minimum quantities, and most can cancel for convenience, so the company's large new-business totals (about $2.0 billion won in the second quarter of 2026 alone) are estimates rather than contracts, as the company's own risk factors state. The earnings level. We measure owner earnings as operating cash flow with working-capital swings removed, less stock compensation and the capital spending needed to keep the business running, and we value the business before interest. On that basis Visteon produced $145 million in 2021, $208 million in 2022, $202 million in 2023, $225 million in 2024 and $260 million in 2025. We anchor on the middle of that stretch, about $208 million a year (roughly $7.65 per share), not on 2025. The window covers the business as it now exists, after the exit from interiors, and includes the 2021 chip-shortage year as well as the stronger years since. 2025 was the strongest of the five years, and the first half of 2026 was weaker: net income attributable to Visteon fell to $80 million from $138 million a year earlier and operating cash flow was $43 million against $165 million, as memory-chip costs rose and customer production slipped. On its July call management said agreements recovering much of the memory-cost increase were signed in the second quarter, with the rest expected in the second half. Two soft quarters, with those cost recoveries still being completed, do not yet move the anchor, but they set the near-term path: owner earnings rose about 17% in 2025, while our base case assumes no growth from the anchor in year one. Taxes. Visteon had $880 million of U.S. federal net operating losses at the end of 2025, which keep its U.S. cash taxes low. We estimate they are used up within about seven years, after which cash taxes rise by an estimated $25 million to $30 million a year. Every case carries that step. Base case, about $98.56 a share. Pre-interest owner earnings hold near $208 million a year for seven years, step down to about $183 million as the U.S. tax losses run out, hold there through year 25, then fade to zero over the following ten years. No growth is credited. New awards are not guaranteed; S&P data cited in the 2025 10-K pointed to a low-single-digit decline in 2026 production at Visteon's key customers; and sales booked in China fell from $950 million in 2023 to $575 million in 2025 as domestic Chinese automakers gained share. What sustains earnings for decades is the company's record of winning replacement programs as old ones end (it reports winning business at a rate above its sales level). The fade reflects the risk, named in the filing, of Chinese suppliers and automakers expanding outside China, where Visteon has less content. In this case the business is worth about $2,635 million. Visteon held $650 million of cash at June 30, 2026, of which we treat $450 million as more than operations need, against $299 million of debt and about $105 million belonging to outside owners of partly owned subsidiaries, leaving about $2,681 million for shareholders. Bear case, about $42.93 a share. Pre-interest owner earnings start at $160 million in 2026 and 2027, reflecting the first-half 2026 decline, deeper dependence on Ford and continued loss of China sales. In years three to five an industry downturn hits of the kind Visteon went through in 2019 to 2021, the 2020 shutdown followed by the 2021 chip shortage. In that episode the business's pre-interest owner earnings went from $212 million in 2017 to $55 million in 2019, minus $28 million in 2020 and $145 million in 2021; the same proportions applied here give about $42 million, minus $21 million and $109 million. Earnings then recover only to $150 million, erode 3% a year as Chinese competitors gain ground abroad, absorb a smaller U.S. tax step of about $20 million in year ten, and fade to zero by year twenty. The business is worth about $1,059 million; adding $450 million of surplus cash and subtracting $299 million of debt and about $42 million for outside owners leaves about $1,168 million. The balance sheet carries this case: the term loan, priced at a floating rate of 5.48% at year-end 2025, matures in July 2027 and could be repaid from cash, and nothing was drawn on the revolving credit facility at the end of 2025. Bull case, about $149.99 a share. Earnings return to about $250 million, near the 2025 level, and grow 3% a year through year ten as the 44 products launched in the first half of 2026 and the SmartCore computer programs ramp, absorbing a tax step of about $30 million from year seven. Earnings then hold for twenty years and fade over ten. The business is worth about $4,092 million; adding $450 million of surplus cash and subtracting $299 million of debt and about $164 million for outside owners leaves about $4,080 million. In the third quarter of 2026 Visteon began a $200 million accelerated share repurchase; these values use the cash and share count of June 30, 2026, before it. Earlier published estimates for Visteon were built on a different basis and are not comparable. The margin-of-safety price. Confidence in the earnings level is moderate: over five years pre-interest owner earnings ranged from $145 million to $260 million, and the first half of 2026 ran below the anchor. The worst plausible outcome is a deep production slump coinciding with the loss of a large Ford program, or Chinese suppliers displacing Visteon at a major customer; the balance sheet would survive that, since cash exceeds debt, but earnings could fall far, and the assets are engineering teams and assembly plants rather than anything hard to replicate. The likeliest errors are the earnings level and the timing of the U.S. tax step. If the level is $180 million rather than $208 million, the shares are worth about $85; if the tax losses run out after three years rather than seven, about $96. The price assumes a holding period of about three years, during which the company pays a dividend we estimate at about $1.45 a share a year, based on the $20 million paid in the first half of 2026. The margin-of-safety price is $50. From that price the base case implies roughly 28% a year over three years and the lower-earnings variant about 22%; the bear case implies a loss of about 2% a year. Because the base case does not grow, a five-year holding period lowers the base-case figure to about 17% a year.