Autoliv, Inc. (NYSE:ALV) announced that its board has completed its planned review of the company’s operational efficiency and has decided to move forward with the public listing of the company’s Electronics business segment. The listing is expected to conclude by the third quarter of 2018.

Autoliv’s Electronics business is one of the two operating segments within the company that offers restraint control, sensing and brake systems.

While the other segment is called Passive Safety, offering airbag systems, steering wheels, and seatbelts.

Autoliv, Inc. Price and Consensus

In September, the company had informed to conduct a strategic evaluation of its operating structure and look into the possibilities of creating a separate entity with the Electronics business unit.

The key factors behind this spin-off decision include varying technological advancements and skill set needs, different sales growth rates, market requirements etc.

Per the spin-off, the Electronics business segment is anticipated to receive cash investments from the parent company in order to retain Autoliv’s investment grade.

The spin-off company is likely to be listed in both the United States and Sweden. Moreover, Autoliv’s Passive Safety segment would operate under the company’s name post the spin-off and it will continue to trade on the New York Stock Exchange and Nasdaq Stockholm.

Price Performance

In the last 30 days, shares of Autoliv have outperformed the industry it belongs to. The stock has gained 4.5% compared with the industry’s decline of 0.6% during the period.

Zacks Rank & Key Picks

Autoliv carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are American Axle & Manufacturing Holdings AXL, Oshkosh Corporation OSK and AB Volvo VLVLY, each sporting a Zacks Rank #1 (Strong Buy). .

American Axle has an expected long-term growth rate of 8.1%. In the last three months, shares of the company have been up 8.3%.

Oshkosh has an expected long-term growth rate of 16.5%. In the last three months, shares of the company rallied 16.4%.

Volvo has an expected long-term growth rate of 15%. Year to date, shares of the company have soared 63%.

Article syndicated under license from Zack’s via QuoteMedia. Featured Image: twitter