Lear: New Seating Technology on Display at Investor Day, Highlighting Our Narrow Moat Rating

Narrow-moat-rated Lear put seating technologies on display at its investor day, highlighting FlexAir, seat component modularity, and INTU seating. Lear's moat results from intellectual property intangible assets and switching costs. Automakers pay vendors for technologies, like Lear’s, that differentiate vehicles, reduce weight, or lower cost. While one innovation does not make a moat, Lear’s pipeline of new technologies creates a stream of intellectual property that flows into an economic moat. Due to changes in our model, we have raised our fair value estimate to $162 from $150. The 3-star-rated shares of Lear currently trade at a 13% discount to our new fair value estimate.