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Lear Corp LEA

Morningstar Rating
$138.28 +1.86 (1.36%)
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Company Report

Lear Earnings: Improved Results Despite UAW Strike; 2024 Margin Guidance Disappoints

Narrow-moat Lear reported fourth-quarter earnings per share before special items of $3.03, $0.09 shy of the $3.12 FactSet consensus but increasing $0.22 from $2.81 EPS reported a year ago, despite the UAW strike. Results were also negatively affected by supply chain disruptions, inflationary cost pressures, and higher launch costs. Revenue increased 9% to $5.8 billion from $5.3 billion last year, 3% above consensus. Organic revenue rose 5%, 2 percentage points less than a 7% increase in light vehicle production adjusted to Lear's customers, mainly due to the GM truck plant labor stoppage. Revenue growth was supported by new business and inflationary cost recoveries.

Price vs Fair Value

LEA is trading at a 21% discount.
Price
$138.28
Fair Value
$247.00
Uncertainty
High
1-Star Price
$898.80
5-Star Price
$439.80
Economic Moat
Dtsch
Capital Allocation
Gxgdslnfz

Bulls Say, Bears Say

Bulls

Lear's above-industry growth rates are supported by a growing global premium-vehicle segment and increasing penetration of automotive electrical and electronic content.

Bears

The auto-parts supply industry is highly competitive, and customers expect annual, contractual price reductions.

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News

Trading Information

Previous Close Price
$136.42
Day Range
$136.03139.13
52-Week Range
$117.79157.91
Bid/Ask
$137.41 / $138.78
Market Cap
$7.89 Bil
Volume/Avg
450,134 / 538,261

Key Statistics

Price/Earnings (Normalized)
11.60
Price/Sales
0.35
Dividend Yield (Trailing)
2.23%
Dividend Yield (Forward)
2.23%
Total Yield
5.99%

Company Profile

Lear designs, develops, and manufactures automotive seating and electrical systems and components. Seating components include frames and mechanisms, covers (leather and woven fabric), seat heating and cooling, foam, and headrests. Automotive electrical distribution and connection systems and electronic systems include wiring harnesses, terminals and connectors, on-board battery chargers, high-voltage battery management systems, high-voltage power distribution systems, domain controllers, telematics control units, gateway modules, vehicle positioning for automated and autonomous driving, embedded control software, cloud and mobile device software and services, and cybersecurity. Lear's largest customer and regional market is GM and North America at 20% and 44% of 2022 revenue, respectively.
Sector
Consumer Cyclical
Industry
Auto Parts
Stock Style Box
Small Core
Total Number of Employees
186,600

Competitors

Valuation

Metric
LEA
FRVIA
APTV
Price/Earnings (Normalized)
11.607.1016.15
Price/Book Value
1.600.601.90
Price/Sales
0.350.101.11
Price/Cash Flow
6.681.379.92
Price/Earnings
LEA
FRVIA
APTV

Financial Strength

Metric
LEA
FRVIA
APTV
Quick Ratio
0.860.701.15
Current Ratio
1.350.981.72
Interest Coverage
8.697.345.30
Quick Ratio
LEA
FRVIA
APTV

Profitability

Metric
LEA
FRVIA
APTV
Return on Assets (Normalized)
4.91%1.64%14.60%
Return on Equity (Normalized)
14.62%11.57%33.67%
Return on Invested Capital (Normalized)
10.15%2.89%20.44%
Return on Assets
LEA
FRVIA
APTV
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