Lear (LEA) AI Stock Analysis

• Market Cap: $5.09B
• Dividend Yield: 3.23%
• Average Volume (3M): 631.45K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.71
• Revenue Growth: -3.15%
• EPS Growth: -6.70%
• Country: US
• Employees: 173,700
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Auto - Parts
• EPS (TTM): 3.12
• Shares Outstanding: 53,463,493
• 10 Day Avg. Volume: 732,819
• 30 Day Avg. Volume: 631,454
• PEG Ratio: -1.92
• Price to Book (P/B): 1.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.31
• Enterprise Value/Market Cap: 1.75
• Enterprise Value/Revenue: 0.10
• Enterprise Value/Gross Profit: 5.65
• Enterprise Value/Ebitda: 1.52
• 1Y Price Target: $104.33
• Price Target Upside: 11.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 75 Outperform
• Price Target: $102.00 ▲(9.08%Upside)

Lear's overall stock score is driven by strong financial performance and a healthy valuation, with positive indications from recent earnings calls. However, technical analysis shows mixed signals, and external risks from trade uncertainties pose potential challenges. The company's attractive dividend yield and strategic operational improvements are significant positives.

Positive Factors

Financial Performance

Lear Corp reported better operating income compared to the average U.S.-based auto parts supplier, which indicates strong performance.

Growth Potential

Lear's E-Systems business is expected to see above-average growth due to increased connectivity and electrification in vehicles.

Operational Efficiency

New program profitability for seating sees 200bps to 500bps cost saving improvement.

Negative Factors

Guidance and Forecasts

Lear's management decided to withdraw full-year guidance due to elevated macro, regulatory, and industry uncertainty.

Revenue Outlook

2025 revenue guidance was below expectations, despite profitability outlook being better than expected.

Sales Visibility

Reduced visibility to 2027 volumes due to evolving customer production plans lead management to only provide a two-year sales backlog outlook.

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 Corporation generates revenue primarily through the sale of its two main product segments: seating systems and electrical systems. In the seating segment, Lear designs and manufactures complete seat systems, seat frames, mechanisms, and related components, which it sells to major automotive OEMs. Revenue in this segment is driven by long-term supply agreements with automakers, as well as the production of seats for new vehicle models. The electrical segment includes the design and production of electrical distribution systems, connectivity solutions, and electronic control units. Lear earns revenue by supplying these components to OEMs for use in a wide range of vehicle platforms. The company's financial performance is influenced by factors such as global vehicle production volumes, consumer demand for advanced automotive technologies, and its ability to maintain strong relationships with key automotive manufacturers.

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
22.87B	23.31B	23.47B	20.89B	19.26B	17.05B
	Gross Profit
1.57B	1.64B	1.84B	1.41B	1.39B	1.11B
	EBIT
860.70M	257.60M	536.50M	607.90M	675.30M	398.90M
	EBITDA
1.44B	1.46B	1.66B	1.18B	1.25B	1.13B
	Net Income Common Stockholders
477.70M	506.60M	572.50M	327.70M	373.90M	158.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
779.90M	1.05B	1.20B	1.11B	1.32B	1.31B
	Total Assets
14.62B	14.03B	14.70B	13.76B	13.35B	13.20B
	Total Debt
2.76B	2.91B	2.92B	2.61B	2.60B	2.31B
	Net Debt
1.98B	1.86B	1.73B	1.50B	1.28B	1.01B
	Total Liabilities
9.80B	9.43B	9.63B	8.93B	8.54B	8.58B
	Stockholders Equity
4.66B	4.45B	4.92B	4.83B	4.81B	4.61B
Cash Flow		Free Cash Flow
477.90M	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
-499.10M	-543.00M	-761.50M	-830.30M	-646.70M	-468.80M
	Financing Cash Flow
-674.00M	-693.90M	-419.50M	-387.30M	-13.60M	-411.70M

Lear Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 93.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEA, the sentiment is Positive. The current price of 93.51 is above the 20-day moving average (MA) of 90.70, above the 50-day MA of 86.15, and below the 200-day MA of 94.74, indicating a neutral trend. The MACD of 1.00 indicates Negative momentum. The RSI at 59.88 is Neutral, neither overbought nor oversold. The STOCH value of 77.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LEA.

Lear Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VC	83 Outperform	$2.45B	8.53	25.15%	―	-1.35%	-39.06%
APTV	79 Outperform	$15.32B	11.63	15.52%	―	-2.47%	-43.12%
BWA	76 Outperform	$7.45B	27.27	5.38%	1.30%	-8.22%	-52.61%
LEA	75 Outperform	$5.09B	11.17	10.00%	3.23%	-3.15%	-6.70%
ALV	73 Outperform	$8.42B	12.55	28.71%	2.57%	-2.29%	35.00%
GNTX	66 Neutral	$5.00B	13.05	15.90%	2.16%	-1.66%	-9.20%
Sector *	63 Neutral	$6.94B	11.34	2.80%	4.26%	2.68%	-24.70%

Lear Corporate Events

Lear Corporation Holds 2025 Annual Shareholders Meeting

On May 16, 2025, Lear Corporation held its 2025 Annual Meeting of Shareholders, where various proposals were voted on, including the election of directors and the ratification of the appointment of an independent registered public accounting firm. The results of the voting indicate strong support for the current board members and executive compensation, which could imply continued confidence in the company’s leadership and strategic direction.

The most recent analyst rating on (LEA) stock is a Buy with a $180.00 price target. To see the full list of analyst forecasts on Lear stock, see the LEA Stock Forecast page.