Aptiv (APTV) could move higher after its planned April 1 spin-off of Versigent, as there is room for the remaining Aptiv business to trade at a higher valuation, UBS said in a note Thursday.

Even if Versigent trades at 4.5 times 2027 enterprise value to earnings before interest, taxes, depreciation, and amortization, the market would still be valuing the remaining Aptiv business at about $56 a share, which UBS sees as too low.

UBS's sum of the parts analysis suggests investors buying Aptiv at current levels are getting Versigent at no added cost, according to the note.

Versigent is worth about $17 a share within the current Aptiv and about $51 a share as a standalone company, with a fair value range of $44 to $58 a share, the investment firm said.

UBS upgraded Aptiv to buy from neutral and raised its price target to $97 from $89.

Price: 70.59, Change: +0.27, Percent Change: +0.38