Lear (LEA) AI Stock Analysis

• Market Cap: $5.79B
• Dividend Yield: 2.63%
• Average Volume (3M): 539.59K
• Price to Earnings (P/E): 14.1
• Beta (1Y): 0.74
• Revenue Growth: -1.90%
• EPS Growth: -13.86%
• Country: US
• Employees: 173,700
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 3.41
• Shares Outstanding: 50,727,455
• 10 Day Avg. Volume: 456,794
• 30 Day Avg. Volume: 539,586
• PEG Ratio: -1.46
• Price to Book (P/B): 1.22
• Price to Sales (P/S): 0.26
• P/FCF Ratio: 11.65
• Enterprise Value/Market Cap: 1.55
• Enterprise Value/Revenue: 0.39
• Enterprise Value/Gross Profit: 5.52
• Enterprise Value/Ebitda: 7.67
• 1Y Price Target: $142.36
• Price Target Upside: 24.71% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): 14.5
• Revenue Forecast (FY): $23.65B

• Rating: 72 Outperform
• Price Target: $127.00 ▲(11.25% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by healthy (though recently softening) financial performance and improving balance-sheet leverage, alongside a strong technical uptrend with positive momentum. Moderating factors are the 2025 margin/FCF step-down and only average valuation support, while the earnings call was net positive due to improving 2026 profitability/cash guidance tempered by production and mix headwinds plus restructuring costs.

Positive Factors

Major New Program Awards

Winning the largest-ever seating program with GM provides multi-year secured content and stable production volumes once launched, materially increasing revenue visibility and reinforcing OEM relationships and manufacturing scale advantages that persist across vehicle program cycles.

Improving Leverage

A meaningful decline in debt-to-equity strengthens financial flexibility, lowering interest burden and enabling sustained investments in automation, capex, and share returns. Improved balance-sheet health increases resilience through cyclical industry downturns and funds strategic initiatives over the medium term.

Operational Savings & Cash Generation

Recurring net-performance savings demonstrate scalable operational improvements and productivity gains that sustainably bolster margins and free cash flow. Consistent efficiency programs support margin recovery, fund capex/automation, and enhance cash conversion across cycles.

Negative Factors

Thin Margins

Persistently low and compressed margins leave limited buffers for commodity, labor, or mix shocks. For a capital- and labor-intensive auto supplier, thin margins constrain reinvestment capacity and increase sensitivity to volume swings, pressuring sustained profitability in adverse scenarios.

E-Systems Revenue & Margin Pressure

E-Systems faces structural headwinds from lower volumes on certain EV platforms and product wind-downs, reducing a key diversification pillar. Continued weakness in electrical content jeopardizes segment margins and offsets Seating gains, limiting company-wide margin improvement potential.

Sustained Volume/Mix Headwinds

An $800M volume/mix drag reflects multi-program roll‑offs and EV-related production shifts that erode near-term revenue and per-vehicle content. Such structural program timing issues depress utilization and margins for several quarters, requiring sustained wins or mix improvements to restore growth.

Lear Business Overview & Revenue Model

Company Description

Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufacturers in North America, Europe, Africa, Asia, and South America. Its Seating segment offers seat systems, seat subsystems, keyseat components, seat trim covers, seat mechanisms, seat foams, and headrests, as well as surface materials, such as leather and fabric for automobiles and light trucks, compact cars, pick-up trucks, and sport utility vehicles. The company's E-Systems segment provides electrical distribution and connection systems that route electrical signals and networks; and manage electrical power within the vehicle for various powertrains. This segment's products comprise wire harnesses, terminals and connectors, engineered components, and junction boxes; electronic system products, including body domain control modules, smart and passive junction boxes, gateway and communication modules, integrated power modules, and high voltage switching and power control systems. It also offers software and connected services comprising Xevo Market, an in-vehicle commerce and service platform; and software and services for the cloud, vehicles, and mobile devices. In addition, this segment provides cybersecurity software; advanced vehicle positioning for automated and autonomous driving applications; and short-range communication and cellular protocols for vehicle connectivity. It offers its products and services under the XEVO, GUILFORD, EAGLE OTTAWA, ConfigurE+, INTUTM, LEAR CONNEXUSTM, EXO, JOURNEYWARE, ProTec, SMART JUNCTION BOX, STRUCSURE, AVENTINO, and TeXstyle brands. Lear Corporation was founded in 1917 and is headquartered in Southfield, Michigan.

How the Company Makes Money

Lear makes money primarily by supplying automotive components to vehicle OEMs under multi-year vehicle program awards, generating revenue largely on a per-vehicle or per-component basis tied to OEM production volumes. 1) Seating segment revenue: Lear earns revenue from designing, engineering, and manufacturing complete seating systems (including seat structures/frames, mechanisms, foam, trim covers, headrests, and integrated seat functions depending on program scope). Revenue is typically recognized as seats or seat components are produced and shipped for specific OEM vehicle platforms. Pricing and profitability are influenced by program launch cadence, model mix, raw material and labor costs, manufacturing efficiency, and contractual terms such as productivity/continuous-improvement commitments and, where applicable, recoveries for certain cost changes. 2) E-Systems segment revenue: Lear generates revenue by producing electrical distribution systems and components that route power and data through the vehicle. This includes wiring harnesses, terminals, connectors, junction/fuse boxes, and related engineered assemblies. Similar to Seating, revenue is driven by shipments aligned to OEM production volumes and by the content Lear supplies per vehicle (content per vehicle can rise with added electronics and feature complexity). Profitability depends on engineering content, manufacturing footprint and labor, supply-chain execution, and program pricing/terms. 3) Engineering, tooling, and program-related income: For many automotive supplier relationships, OEM programs involve upfront engineering and launch activities and may include tooling and other program assets. Where applicable under contract terms, Lear can receive compensation associated with engineering services and/or tooling and launch-related reimbursements in addition to ongoing part sales; specific program treatment varies by customer and contract. 4) Customer concentration and platform awards as key drivers: Lear’s earnings are heavily influenced by winning new vehicle platform and component awards from OEMs, successfully launching those programs, and retaining business through competitive re-sourcing cycles. The company’s global manufacturing and just-in-time delivery capabilities, as well as long-term OEM relationships, are significant factors supporting volume and continuity. 5) Aftermarket/other revenue: null

Lear Financial Statement Overview

Summary

Financials are solid but softened in 2025: revenue held near ~$23B, leverage improved (debt-to-equity down to ~0.53), and operating/free cash flow remained positive. Offsetting this, margins compressed in 2025 (gross and net), ROE stepped down, and free cash flow fell sharply with weaker cash conversion.

Income Statement

Revenue has been fairly stable at ~$23B over the last three years (2023–2025), with only modest growth and a slight decline in 2024. Profitability is positive but thin for the industry: 2025 gross margin (~6.5%) and net margin (~1.9%) are down versus 2023–2024, and operating profitability also stepped down year over year. Net income remains solid in dollar terms, but the margin compression in 2025 is the key concern despite generally steady demand.

Balance Sheet

Leverage looks manageable and improving: debt-to-equity declined to ~0.53 in 2025 from ~0.79 in 2024, supported by higher equity and lower debt. Returns on equity are decent (mid-to-high single digits in 2025, low double digits in 2023–2024), indicating the balance sheet is still producing reasonable shareholder returns. The main weakness is the step-down in return on equity in 2025 versus the prior two years, consistent with the profitability softening.

Cash Flow

Operating cash flow remains strong (about $1.1B in 2025), and free cash flow stayed positive (~$527M). However, free cash flow declined sharply in 2025 (down ~28%), and free cash flow covers only about half of net income in 2025, pointing to less efficient cash conversion than ideal. Cash generation is still supportive overall, but the recent downshift and volatility versus prior years are the key negatives.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	23.26B	23.30B	23.46B	20.88B	19.26B
Gross Profit	1.50B	1.84B	1.75B	1.57B	1.49B
EBITDA	725.90M	1.46B	1.48B	1.18B	1.25B
Net Income	436.80M	506.60M	572.50M	327.70M	373.90M
Balance Sheet
Total Assets	14.84B	14.03B	14.70B	13.76B	13.35B
Cash, Cash Equivalents and Short-Term Investments	1.04B	1.06B	1.20B	1.12B	1.32B
Total Debt	4.10B	4.08B	3.55B	3.34B	3.25B
Total Liabilities	9.64B	9.43B	9.63B	8.93B	8.54B
Stockholders Equity	5.04B	4.45B	4.92B	4.68B	4.64B
Cash Flow
Free Cash Flow	527.20M	561.40M	622.80M	383.20M	85.00M
Operating Cash Flow	1.09B	1.12B	1.25B	1.02B	670.10M
Investing Cash Flow	-516.80M	-543.00M	-761.50M	-830.30M	-646.70M
Financing Cash Flow	-618.50M	-693.90M	-419.50M	-387.30M	-13.60M

Lear Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 114.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEA, the sentiment is Negative. The current price of 114.16 is below the 20-day moving average (MA) of 126.88, below the 50-day MA of 125.31, and above the 200-day MA of 107.45, indicating a neutral trend. The MACD of -3.09 indicates Positive momentum. The RSI at 26.02 is Positive, neither overbought nor oversold. The STOCH value of 11.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LEA.

Lear Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LEA	72 Outperform	$5.79B	14.06	8.79%	2.63%	-1.90%	-13.86%
VC	72 Outperform	$2.39B	12.87	13.90%	0.57%	-4.03%	-39.51%
ALV	69 Neutral	$7.69B	12.37	29.57%	2.60%	0.84%	26.17%
LKQ	68 Neutral	$7.49B	12.73	9.42%	4.00%	-3.71%	-0.27%
BWA	62 Neutral	$10.47B	35.20	4.80%	1.24%	0.08%	-83.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DAN	59 Neutral	$3.41B	38.91	-2.91%	1.70%	-18.23%	―