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Adient PLC ADNT

Morningstar Rating
$33.37 −0.07 (0.21%)
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Company Report

Adient Earnings: North America and Europe Improvement Offset Asian Headwinds

Adient’s fiscal 2024 first-quarter adjusted diluted EPS down 8.8% year over year to $0.29 was, per management, in line with its expectation. However, it also missed the LSEG consensus of $0.47 and sent the stock down by over 7% in Feb. 7 trading. We don’t see a reason to change our thesis or fair value estimate on the results, and management maintained its fiscal 2024 outlook after adjusting for $125 million in lost revenue and $25 million in lost EBITDA from the UAW strike. Fiscal 2024 revenue is now guided at about $15.4 billion to $15.5 billion while adjusted EBITDA is now expected to be about $985 million. We like that management spent about $100 million on share repurchases in the quarter instead of waiting for the second half of the fiscal year when results are expected to be better on more revenue plus improvement in China as launches pickup. The buyback plan has remaining authorization of $435 million, and we think Adient will continue to use it while possibly also reducing debt beyond the EUR 123 million 3.5% notes maturing in August.

Price vs Fair Value

ADNT is trading at a 53% discount.
Price
$33.37
Fair Value
$45.00
Uncertainty
Very High
1-Star Price
$212.14
5-Star Price
$35.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

We see more debt reduction coming, which we think could mean substantial share price appreciation once vehicle volumes rise from recent levels held back by the pandemic and chip shortage.

Bears

Despite its leading position, Adient still operates in a very cyclical industry, and its stock will probably at times be sold off too severely for macroeconomic reasons. It's also in the midst of a multiyear turnaround effort.

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News

Trading Information

Previous Close Price
$33.44
Day Range
$32.9933.61
52-Week Range
$30.1146.51
Bid/Ask
$32.84 / $33.81
Market Cap
$3.04 Bil
Volume/Avg
715,866 / 1.0 Mil

Key Statistics

Price/Earnings (Normalized)
16.69
Price/Sales
0.21
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
2.13%

Company Profile

Adient began trading Oct. 31, 2016, when Johnson Controls spun off its automotive experience segment into this new company. Adient is the leading seating supplier to the industry with about one third of the global market. Its share in China is now nearly 20%, down from about 45%, following the sale of its main joint venture there at the end of fiscal 2021. Unconsolidated seating revenue from joint ventures after factoring in the sale was about $3.8 billion in fiscal 2023 and consolidated China revenue was $1.4 billion. The company is headquartered in Ireland but has corporate offices in the Detroit area. Fiscal 2023 (Sept. 30 year-end) consolidated revenue, which excludes joint venture sales, was $15.4 billion.
Sector
Consumer Cyclical
Industry
Auto Parts
Stock Style Box
Small Core
Total Number of Employees
70,000

Competitors

Valuation

Metric
ADNT
FRVIA
MGA
Price/Earnings (Normalized)
16.697.1010.82
Price/Book Value
1.330.601.31
Price/Sales
0.210.100.36
Price/Cash Flow
5.701.375.30
Price/Earnings
ADNT
FRVIA
MGA

Financial Strength

Metric
ADNT
FRVIA
MGA
Quick Ratio
0.750.700.72
Current Ratio
1.150.981.11
Interest Coverage
2.357.349.47
Quick Ratio
ADNT
FRVIA
MGA

Profitability

Metric
ADNT
FRVIA
MGA
Return on Assets (Normalized)
4.04%1.64%4.91%
Return on Equity (Normalized)
17.14%11.57%13.23%
Return on Invested Capital (Normalized)
10.31%2.89%8.76%
Return on Assets
ADNT
FRVIA
MGA
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