Visteon Investor Day – Compelling LT Growth Story, but NT Memory Concerns Likely to Persist

Research evidence excerpt

Visteon Investor Day – Compelling LT Growth Story, but NT Memory Concerns Likely to Persist

June 26, 2026

So, what drove the stock lower, with VC shares down 6%? Part of it was simply expectations, with mgmt’s 2029 targets

in-line with our forecasts and buyside estimates. However, as investors dug into the numbers, a few things do stand out:

●DRAM inflation expected to get worse. For 2026, gross DRAM inflation is now expected to be 2.5% of revs (vs 2%

previously), implying a $94 MM increase and translating to a ~75% gross cost increase. And for 2027 VC sees an

even bigger increase, of around $150 MM (4% of sales). Mgmt pointed to broadening inflation across purchased

components, including other areas of the semi supply-chain (NAND, flash, MOFSETS, etc). And while Visteon

expects to offset the vast majority of these costs via price recoveries, it’s clear they won’t be passing along all of

it. EBITDA is taking a hit, as we est $8-10 MM in net cost headwinds for VC in 2026 (-50 bps to margins). And

for 2027, mgmt expects 100 bps drag, implying ~$20 MM in net cost. Beyond ’27, memory prices are expected to

stabilize, though remain elevated (aided by new capacity & new sourcing out of China). Ex-DRAM / semi inflation,

VC’s EBITDA margins would be closer to 13% in 2026, and 15% by 2029.

●Ford/GM insourcing of cockpit domain controllers. While VC is expecting very strong growth out of Asia, North

America will be a shrinking market, with sales dropping from $1.2 bn this yr to ~$1 bn by 2029. Within that,

revs with Ford & GM are expected to be cut in half, to $410 MM vs $800 MM currently. To be clear that primarily

reflects the wind-down of legacy cluster programs with both OEs. But, VC does not appear to be winning in key

higher-value areas, including CDCs.