tiprankstipranks
Trending News
More News >
Lear Corp (LEA)
NYSE:LEA
Advertisement

Lear (LEA) AI Stock Analysis

Compare
516 Followers

Top Page

LEA

Lear

(NYSE:LEA)

Rating:76Outperform
Price Target:
$113.00
▲(1.76% 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
Earnings
Lear reported solid 2Q results with revenue, operating margin, and EPS above the Street.
Revenue Growth
Lear announced some conquest wins in Seating and E-Systems.
Negative Factors
Financial Guidance
The 2H25 EBIT guidance is below consensus, and revenue growth remains more challenged.
Market Impact
Lear expects its OEM customers to undergrow the market in part due to tariff impacts on exports to the US.

Lear (LEA) vs. SPDR S&P 500 ETF (SPY)

Lear Business Overview & Revenue Model

Company DescriptionLear 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 MoneyLear 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 Earnings Call Summary

Earnings Call Date:Jul 25, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with notable achievements in operational efficiency, margin expansion, and strategic business wins, offset by challenges in sales, volume headwinds, and tariff-related cash flow issues.
Q2-2025 Updates
Positive Updates
Consistent Revenue and Core Operating Earnings
Lear delivered $6 billion of revenue in Q2 2025, with core operating earnings of $292 million, maintaining a consistent performance compared to Q2 2024.
Seating and E-Systems Margin Expansion
Seating margins expanded by 45 basis points and E-Systems by 70 basis points, driven by efficiency improvements and restructuring investments.
Increased Full-Year Performance Outlook
Lear increased its full-year net performance outlook by approximately $25 million to more than $150 million.
New Business Wins
Lear won key conquest programs with BMW and Ford, and significant awards in China, contributing to a robust backlog in E-Systems approaching $1 billion in annual sales.
Strong Cash Flow and Shareholder Returns
Operating cash flow was $296 million, allowing Lear to reinstate its share repurchase plan, repurchasing $25 million of shares in the quarter.
Negative Updates
Flat Sales and Operating Margins
Sales were flat year-over-year at $6 billion, with adjusted operating margins slightly lower due to lower production on key platforms.
Volume and Mix Headwinds
A $1.3 billion year-over-year headwind from volume and mix, attributed to lower volumes on key platforms and wind-down of discontinued product lines.
Challenges in Tariff Recovery
There is a $30 million impact from the lag in tariff recovery payments, affecting free cash flow expectations.
Company Guidance
In the second quarter of 2025, Lear Corporation reported $6 billion in revenue, with core operating earnings of $292 million and an operating margin of 4.8%. The adjusted earnings per share stood at $3.47. Lear's operating cash flow was $296 million, matching the financial metrics of the second quarter of 2024. The company experienced a net performance improvement, contributing 45 basis points to Seating and 70 basis points to E-Systems margins in the first half of 2025. Despite macroeconomic uncertainties, Lear increased its full-year net performance outlook by $25 million to over $150 million, reinstating its share repurchase plan with $25 million in shares repurchased in Q2 and $50 million in the first half. Following a $2 billion revolver refinancing and partnership with Palantir for data analytics, Lear announced key business wins, including a conquest program with BMW in Asia and awards with Ford for F-150 and F-250 components, with modularity strategy driving new business worth over $150 million in average annual revenue.

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
78
Positive
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
72
Positive
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
75
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue22.89B23.31B23.47B20.89B19.26B17.05B
Gross Profit1.59B1.64B1.84B1.41B1.39B1.11B
EBITDA1.41B1.46B1.66B1.18B1.25B938.80M
Net Income469.80M506.60M572.50M327.70M373.90M158.50M
Balance Sheet
Total Assets15.32B14.03B14.70B13.76B13.35B13.20B
Cash, Cash Equivalents and Short-Term Investments900.50M1.06B1.20B1.11B1.32B1.32B
Total Debt3.55B2.91B2.92B3.34B3.25B2.87B
Total Liabilities10.11B9.43B9.63B8.93B8.54B8.58B
Stockholders Equity5.08B4.45B4.92B4.68B4.64B4.61B
Cash Flow
Free Cash Flow478.30M561.40M622.80M383.20M85.00M210.80M
Operating Cash Flow1.03B1.12B1.25B1.02B670.10M663.10M
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
Positive
Last Price111.05
Price Trends
50DMA
102.19
Positive
100DMA
94.88
Positive
200DMA
93.52
Positive
Market Momentum
MACD
3.04
Negative
RSI
73.06
Negative
STOCH
77.25
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 111.05 is above the 20-day moving average (MA) of 104.86, above the 50-day MA of 102.19, and above the 200-day MA of 93.52, indicating a bullish trend. The MACD of 3.04 indicates Negative momentum. The RSI at 73.06 is Negative, neither overbought nor oversold. The STOCH value of 77.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LEA.

Lear Risk Analysis

Lear disclosed 29 risk factors in its most recent earnings report. Lear reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Lear Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
$3.42B11.9622.96%0.22%-3.26%-45.84%
79
Outperform
$9.63B13.7229.99%2.35%-0.98%21.64%
79
Outperform
$17.52B13.3315.52%-2.47%-43.12%
76
Outperform
$5.87B12.899.51%2.84%-3.12%-8.23%
67
Neutral
$9.49B46.823.66%1.14%-2.12%-69.42%
66
Neutral
$6.17B15.6816.38%1.71%2.43%-1.25%
61
Neutral
$17.97B12.87-5.30%2.97%1.26%-14.45%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LEA
Lear
111.05
4.30
4.03%
ALV
Autoliv
124.69
30.16
31.91%
BWA
BorgWarner
44.03
11.61
35.81%
APTV
Aptiv
80.44
11.36
16.44%
GNTX
Gentex
28.48
-0.77
-2.63%
VC
Visteon
125.13
29.33
30.62%

Lear Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Lear Extends $2 Billion Credit Facility to 2030
Positive
Jul 30, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 22, 2025