Lear downgraded to Neutral at BofA on limited upside

As previously reported, BofA analyst Federico Merendi downgraded Lear (LEA) to Neutral from Buy with a price target of $123, down from $135. Shares are currently trading below Lear’s historical valuation, but the firm sees little room for the stock to re-rate higher given the challenges the automotive industry is currently facing as the lack of support from auto production is a hurdle for Lear to deliver growth and margin expansion, the analyst tells investors. The firm still expects the current valuation discount to North American suppliers to narrow, the analyst noted.