Lear (LEA) AI Stock Analysis

• Market Cap: $5.40B
• Dividend Yield: 3.04%
• Average Volume (3M): 638.37K
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.69
• Revenue Growth: -3.12%
• EPS Growth: -8.23%
• Country: US
• Employees: 173,700
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 3.47
• Shares Outstanding: 53,206,093
• 10 Day Avg. Volume: 879,767
• 30 Day Avg. Volume: 638,370
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: 0.34
• Enterprise Value/Gross Profit: 4.95
• Enterprise Value/Ebitda: 5.58
• 1Y Price Target: $112.91
• Price Target Upside: 11.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 76 Outperform
• Price Target: $113.00 ▲(11.40% Upside)

Lear Corporation's stock is rated positively due to strong financial performance, attractive valuation, and positive technical indicators. The company's strategic initiatives and credit facility extension further bolster its position. However, challenges in sales and tariff recovery present risks that need monitoring.

Positive Factors

Financial Flexibility

Extending the credit facility to 2030 enhances Lear's financial flexibility, supporting long-term strategic initiatives and stability in the automotive industry.

New Business Wins

Winning new contracts with major automakers like BMW and Ford strengthens Lear's market position and contributes to a robust backlog, ensuring future revenue streams.

Margin Expansion

Margin expansion in key segments indicates improved operational efficiency, which can enhance profitability and competitive advantage over time.

Negative Factors

Volume and Mix Headwinds

Significant volume and mix headwinds indicate challenges in maintaining sales momentum, potentially impacting revenue growth and operational efficiency.

Challenges in Tariff Recovery

Delays in tariff recovery can strain cash flow and affect profitability, posing risks to financial performance and operational stability.

Flat Sales and Operating Margins

Flat sales and slightly lower operating margins suggest challenges in revenue growth and cost management, which could pressure future profitability.

Lear Business Overview & Revenue Model

Company Description

Lear Corporation (LEA) is a global leader in automotive seating and electrical systems, providing innovative products and solutions for the automotive industry. With a diverse portfolio, Lear operates through two primary segments: Seating and E-Systems. The Seating segment designs and manufactures automotive seating systems, including seat structures and mechanisms, while the E-Systems segment focuses on advanced electrical distribution systems and electronic components that enhance vehicle connectivity and safety.

How the Company Makes Money

Lear generates revenue through the sale of its seating and electrical systems to major automotive manufacturers worldwide. The company's revenue model is primarily based on long-term contracts with original equipment manufacturers (OEMs), which involves supplying components and systems as part of the vehicle production process. Key revenue streams include the sale of seating systems, electrical distribution systems, and related components. Partnerships with major automotive brands and a focus on innovation in areas such as electric vehicles and smart technology further contribute to Lear's earnings, allowing the company to capture a share of the growing market for advanced automotive features.

Lear Financial Statement Overview

Summary

Lear demonstrates strong revenue growth and maintains robust cash flow operations, yet faces some profitability challenges. The balance sheet remains stable with a balanced leverage approach. Overall, the financial health is solid with potential areas for improvement in profitability and free cash flow growth.

Income Statement

The company's revenue has shown a steady growth trend, with a notable increase from previous years. The TTM (Trailing-Twelve-Months) data indicates a strong gross profit margin of 6.88% and a solid EBIT margin of 3.76%. However, there is a slight decline in net income compared to the previous annual report, reflecting a net profit margin of 2.09% which suggests some pressure on profitability.

Balance Sheet

Lear exhibits a moderate debt-to-equity ratio of 0.59, indicating a balanced use of debt and equity. The equity ratio stands at 31.85%, showcasing a stable financial structure. The return on equity (ROE) is 10.25%, reflecting positive returns but with room for improvement. Overall, the balance sheet maintains a healthy leverage and equity position.

Cash Flow

Free cash flow has decreased in the TTM, with a free cash flow to net income ratio of 1.00, indicating efficient cash conversion. The operating cash flow to net income ratio is 2.15, which is strong and suggests good cash flow management. Although there is a decrease in free cash flow growth, the company maintains healthy cash flow operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.89B	23.31B	23.47B	20.89B	19.26B	17.05B
Gross Profit	1.59B	1.64B	1.84B	1.41B	1.39B	1.11B
EBITDA	1.41B	1.46B	1.66B	1.18B	1.25B	938.80M
Net Income	469.80M	506.60M	572.50M	327.70M	373.90M	158.50M
Balance Sheet
Total Assets	15.32B	14.03B	14.70B	13.76B	13.35B	13.20B
Cash, Cash Equivalents and Short-Term Investments	900.50M	1.06B	1.20B	1.11B	1.32B	1.32B
Total Debt	3.55B	2.91B	2.92B	3.34B	3.25B	2.87B
Total Liabilities	10.11B	9.43B	9.63B	8.93B	8.54B	8.58B
Stockholders Equity	5.08B	4.45B	4.92B	4.68B	4.64B	4.61B
Cash Flow
Free Cash Flow	478.30M	561.40M	622.80M	383.20M	85.00M	210.80M
Operating Cash Flow	1.03B	1.12B	1.25B	1.02B	670.10M	663.10M
Investing Cash Flow	-502.90M	-543.00M	-761.50M	-830.30M	-646.70M	-468.80M
Financing Cash Flow	-602.30M	-693.90M	-419.50M	-387.30M	-13.60M	-411.70M

Lear Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 101.44
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEA, the sentiment is Neutral. The current price of 101.44 is below the 20-day moving average (MA) of 106.69, below the 50-day MA of 103.20, and above the 200-day MA of 94.36, indicating a neutral trend. The MACD of -0.71 indicates Positive momentum. The RSI at 40.17 is Neutral, neither overbought nor oversold. The STOCH value of 16.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LEA.

Lear Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VC	82 Outperform	3.36B	11.51	20.46%	0.22%	-3.26%	-45.84%
ALV	79 Outperform	9.62B	13.48	28.96%	2.36%	-0.98%	21.64%
APTV	79 Outperform	18.78B	19.73	10.45%	―	-0.96%	-66.99%
LEA	76 Outperform	$5.40B	11.71	9.51%	3.04%	-3.12%	-8.23%
BWA	67 Neutral	9.53B	46.34	3.55%	1.14%	-2.12%	-69.42%
GNTX	66 Neutral	6.34B	16.07	―	1.66%	2.43%	-1.25%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Lear Corporate Events

Lear Extends $2 Billion Credit Facility to 2030

On July 24, 2025, Lear Corporation entered into a second amended and restated credit agreement, extending the maturity of its $2.0 billion unsecured revolving credit facility to July 24, 2030. The agreement includes various interest rate options and covenants, with Lear in compliance as of the agreement date, potentially enhancing its financial flexibility and stability in the automotive industry.