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Linamar Corp. (TSE:LNR)
TSX:LNR
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Linamar
(TSX:LNR)
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Rating:74Outperform
Price Target:
C$82.00
▲(7.47% Upside)
Linamar's overall stock score reflects a stable financial position with strong cash flow generation and operational efficiency. The technical analysis indicates strong momentum, although overbought conditions suggest caution. Valuation appears high, and the earnings call highlights both strengths in the Mobility segment and challenges in the industrial segment. The company's proactive approach to share repurchases and cash flow management is a positive factor.
Positive Factors
Negative Factors
Linamar (LNR) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$4.41B
Dividend Yield1.42%
Average Volume (3M)115.61K
Price to Earnings (P/E)21.0
Beta (1Y)1.29
Revenue Growth-2.60%
EPS Growth-64.22%
CountryCA
Employees32,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)2.81
Shares Outstanding59,809,586
10 Day Avg. Volume104,311
30 Day Avg. Volume115,609
Financial Highlights & Ratios
PEG Ratio-0.28
Price to Book (P/B)0.64
Price to Sales (P/S)0.33
P/FCF Ratio5.06
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit3.42
Enterprise Value/Ebitda3.34
Forecast
1Y Price Target
$81.25Price Target Upside6.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Linamar Business Overview & Revenue Model
Company DescriptionLinamar Corporation (LNR) is a diversified manufacturing company based in Canada, primarily operating in the automotive, industrial, and agricultural sectors. It specializes in precision machining, assembly, and the development of complex components and systems. The company offers a wide range of products, including powertrain and driveline components, mobility solutions, and products for the agriculture and construction industries.
How the Company Makes MoneyLinamar generates revenue through several key streams, including the manufacture and sale of automotive components, which account for a significant portion of its earnings. The company partners with major automotive manufacturers, providing them with essential parts and systems that are integral to vehicle performance. Additionally, Linamar's industrial segment, which includes products for agricultural and construction equipment, contributes to its revenue through both direct sales and long-term contracts with clients. The company's focus on innovation and technology-driven solutions allows it to enhance its product offerings and maintain competitive pricing, further driving profitability. Strategic alliances and partnerships with other industry players also play a crucial role in expanding Linamar's market reach and enhancing its revenue potential.
Linamar Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call highlights a strong performance in the Mobility segment and effective tariff management, contributing to significant free cash flow and market share gains. However, there are notable challenges in the industrial segment with significant sales declines and soft agricultural markets. The overall sentiment is mixed with strong positives in certain areas but ongoing challenges in others.Q2-2025 Updates
Positive Updates
Strong Free Cash Flow
Achieved nearly $180 million in free cash flow, driven by strong earnings and careful management of CapEx and working capital.
Mobility Segment Growth
Mobility segment saw 20% operating earnings growth with margins back in the normal range of 6% to 8%.
Tariff Strategy Success
Minimal impact from U.S. tariffs due to a long-term strategy of producing products on the same continent as customers.
Market Share Gains
Achieved market share gains in every business, helping to offset soft markets.
Recognition as Supplier of the Year
Awarded Supplier of the Year by Ford Motor Company for crisis management during Hurricane Helene.
Negative Updates
Sales Decline
Overall sales were down 7% over last year, with a 22% decline in the industrial business.
Industrial Segment Challenges
Industrial sales decreased by 22.4%, primarily due to lower agricultural and access equipment sales.
Global Market Declines
Global vehicle production volumes decreased by 3.8% in North America and 2% in Europe.
Soft Agricultural Markets
The large ag industry is expected to decline by 30% year-over-year in North America.
Mobility Sales Decline
Mobility sales decreased by 0.4% over Q2 last year, due to downturns in European and North American automotive markets, including EVs.
Company Guidance
During the Linamar Second Quarter 2025 Earnings Conference Call, Linda Hasenfratz provided detailed guidance, highlighting several key metrics. The Mobility segment saw a 20% growth in operating earnings, with margins returning to the normal range of 6% to 8%, demonstrating the company's ability to generate strong cash flow, nearly $180 million in free cash flow, despite a 7% overall sales decline to $2.6 billion. The Mobility segment's sales remained flat, while the Industrial segment experienced a significant 22% decrease. The company's net debt-to-EBITDA ratio was 1.02, indicating a strong balance sheet. Linamar also repurchased shares under its NCIB program, spending nearly $100 million. Despite challenges, the company is optimistic about continued free cash flow generation and plans to be active in share repurchases in the upcoming quarter.Linamar Financial Statement Overview
Summary
Linamar exhibits a stable financial position with strong cash flow generation and a balanced leverage profile. While revenue growth has slowed, the company maintains operational efficiency and a solid equity base. Continued focus on improving profitability and returns on equity could enhance financial performance.Income Statement
Linamar's income statement shows a stable gross profit margin of around 14.5% in TTM, with a slight decline in revenue growth rate of -1.98%. The net profit margin remains modest at 2.48%, indicating profitability challenges. However, the company maintains a healthy EBIT and EBITDA margin, reflecting operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a manageable debt-to-equity ratio of 0.39, indicating a balanced approach to leveraging. Return on equity is moderate at 4.59%, suggesting room for improvement in generating returns for shareholders. The equity ratio stands at 53.85%, showcasing a solid equity base.70
Positive
Cash Flow
Linamar's cash flow statement highlights a strong free cash flow growth rate of 17.45% in TTM, demonstrating effective cash generation. The operating cash flow to net income ratio is 4.39, indicating robust cash flow relative to net income. The free cash flow to net income ratio of 0.63 suggests efficient cash utilization.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 10.19B | 10.58B | 9.73B | 7.92B | 6.54B | 5.82B |
| Gross Profit | 1.49B | 1.50B | 1.32B | 974.81M | 937.65M | 802.56M |
| EBITDA | 1.52B | 1.52B | 1.27B | 986.06M | 1.02B | 894.10M |
| Net Income | 210.25M | 258.26M | 503.05M | 426.19M | 420.56M | 279.13M |
Balance Sheet | ||||||
| Total Assets | 10.78B | 10.50B | 9.85B | 8.58B | 7.39B | 7.56B |
| Cash, Cash Equivalents and Short-Term Investments | 1.00B | 1.05B | 653.33M | 860.51M | 928.43M | 861.10M |
| Total Debt | 2.21B | 2.29B | 1.77B | 1.31B | 791.54M | 1.30B |
| Total Liabilities | 4.98B | 5.07B | 4.53B | 3.76B | 2.79B | 3.20B |
| Stockholders Equity | 5.80B | 5.43B | 5.32B | 4.81B | 4.60B | 4.35B |
Cash Flow | ||||||
| Free Cash Flow | 835.58M | 593.68M | -17.34M | 37.06M | 666.40M | 1.15B |
| Operating Cash Flow | 1.23B | 1.13B | 745.37M | 447.71M | 909.46M | 1.41B |
| Investing Cash Flow | -357.23M | -1.12B | -1.19B | -715.74M | -267.32M | -290.31M |
| Financing Cash Flow | -633.07M | 363.68M | 255.57M | 176.81M | -572.77M | -593.41M |
Linamar Technical Analysis
Positive
76.30
Price Trends
73.22
Positive
68.39
Positive
60.49
Positive
Market Momentum
0.38
Positive
56.98
Neutral
33.89
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:LNR, the sentiment is Positive. The current price of 76.3 is below the 20-day moving average (MA) of 76.43, above the 50-day MA of 73.22, and above the 200-day MA of 60.49, indicating a neutral trend. The MACD of 0.38 indicates Positive momentum. The RSI at 56.98 is Neutral, neither overbought nor oversold. The STOCH value of 33.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:LNR.
Linamar Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$18.64B | 11.22 | 8.76% | 4.01% | -0.54% | 26.31% | |
74 Outperform | $4.41B | 20.99 | 3.61% | 1.42% | -2.60% | -64.22% | |
64 Neutral | C$260.97M | 10.98 | 6.01% | 6.14% | -3.50% | -22.76% | |
62 Neutral | C$778.83M | -12.34 | -4.32% | 1.87% | -8.84% | -148.15% | |
53 Neutral | C$983.21M | -122.60 | -0.48% | 4.94% | 2.77% | 81.01% | |
45 Neutral | C$1.86B | -8.08 | -29.35% | ― | 9.12% | -182.49% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
TSE:LNR
Linamar
76.30
12.83
20.21%
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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.