Linamar (LNR) AI Stock Analysis

• Market Cap: C$5.15B
• Dividend Yield: 1.32%
• Average Volume (3M): 94.25K
• Price to Earnings (P/E): 8.5
• Beta (1Y): 1.22
• Revenue Growth: -5.33%
• EPS Growth: -57.58%
• Country: CA
• Employees: 32,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 2.28
• Shares Outstanding: 59,447,987
• 10 Day Avg. Volume: 76,957
• 30 Day Avg. Volume: 94,251
• PEG Ratio: 0.06
• Price to Book (P/B): 0.82
• Price to Sales (P/S): 0.49
• P/FCF Ratio: 5.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$104.30
• Price Target Upside: 20.35% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 11.24
• Revenue Forecast (FY): C$11.24B

• Rating: 69 Neutral
• Price Target: C$97.00 ▲(11.93% Upside)
• Action: Downgraded Date: 03/11/26
• Date: Action: Downgraded 03/11/26

The score is driven primarily by solid financial performance (improving 2025 profitability and manageable leverage) and an attractive valuation (low P/E). These positives are moderated by weaker near-term technicals and historical volatility in earnings and free-cash-flow momentum.

Positive Factors

Improved Profitability

A meaningful rebound in net margin and stronger ROE indicate the company regained pricing or cost discipline and is generating better returns on capital. This structural improvement supports reinvestment in tooling, R&D, and program ramps and reduces reliance on cyclical volume to drive profitability over the medium term.

Solid Cash Generation

Sustained operating cash generation and sizeable positive free cash flow provide durable financial flexibility for capex, program launch funding, debt service, and shareholder returns. Robust cash conversion in 2025 underpins the firm's ability to support multi-year OEM contracts and invest through product transitions.

Manageable Leverage

An improved debt-to-equity ratio reflects de-risking of the capital structure and greater balance-sheet resilience. Lower leverage increases capacity to finance program-specific capital, absorb demand shocks, and pursue strategic initiatives without immediately constraining cash returns or credit flexibility.

Negative Factors

Recent Revenue Weakness

A decline in revenue versus the prior year signals vulnerability to OEM production swings and program timing. Over the medium term, falling volumes or lower content-per-vehicle can erode operating leverage, pressure margins, and slow the pace at which Linamar can expand higher-value assembly content.

Volatile Cash & Earnings

Material variability in free cash flow and earnings reduces predictability for reinvestment and distributions. For a manufacturing OEM supplier, swings driven by program ramps, capex timing or working capital cycles can force reactive financing or delay strategic investments, raising execution risk over several quarters.

OEM Concentration & Platform Risk

Heavy reliance on OEMs and platform cycles concentrates demand risk: delays or lower volumes at key customers can materially impact revenue. Additionally, electrification and platform shifts require capital and retooling; failure to capture EV content or higher investment needs could compress margins and extend payback timelines.

Linamar Business Overview & Revenue Model

Company Description

Linamar Corporation, together with its subsidiaries, design, develop, and produce engineered products in Canada, North America, Europe, and the Asia Pacific. It operates through two segments, Mobility and Industrial. The Mobility segment engages in the design, development, and manufacture of precision metallic components, modules, and systems for vehicle and power generation markets. It manufactures precision-machined components and assemblies that are used in transmissions, engines, and driveline systems; driveline systems, such as power transfer units, rear-drive units, and engineered gears; and engine components, including cylinder blocks and assemblies, cylinder heads and complete head assemblies, camshaft assemblies, connecting rods, flywheels, fuel rails, and fuel body/pumps. This segment also offers transmission cases, shafts, shaft and shell assemblies, clutch modules and clutch subcomponents, valve bodies, pumps, planetary gear assemblies, and housings/covers. It serves automotive original equipment manufacturers and commercial vehicle customers. The Industrial segment designs and produces mobile products, such as compact and rough terrain scissor lifts, vertical mast lifts, booms, and telehandlers primarily to construction equipment rental companies. This segment also offers harvesting equipment, including combine grain header attachments, self-propelled windrowers, pick-up headers, and hay products; and combine corn header attachments. Linamar Corporation has a strategic alliance with Ballard Power Systems Inc. for the co-development and sale of fuel cell powertrains and components for class 1 and 2 vehicles in North America and Europe. Linamar Corporation was founded in 1964 and is headquartered in Guelph, Canada.

How the Company Makes Money

Linamar makes money mainly by manufacturing and supplying engineered components, systems, and modules to OEM customers under multi-year supply arrangements and ongoing production programs. Its core revenue stream is the sale of parts and assemblies used in vehicle and mobility applications; revenue in this business is largely tied to customer production volumes, program launches/ramps, model lifecycle dynamics, and the mix of content-per-vehicle (i.e., the value of Linamar parts incorporated into each unit produced by the OEM). A second major revenue stream comes from its industrial-focused operations, which generate sales by providing motion and power products and other engineered solutions to industrial and off-highway equipment customers; demand here is more closely linked to industrial and agricultural/end-market cycles and capital spending patterns. Across both areas, earnings are driven by (1) per-unit manufacturing margins achieved through scale, automation, and manufacturing efficiency, (2) engineering and value-added content that supports higher-priced assemblies versus commodity parts, and (3) incremental growth from new program wins and product launches that expand production volumes and/or increase content per end product. Significant factors influencing revenue and profitability typically include customer concentration with large OEMs, commodity and input-cost pass-through mechanisms where contractually available, foreign-exchange movements due to global operations, and the pace of platform transitions (including electrification) that can shift product mix and required manufacturing investments.

Linamar Financial Statement Overview

Summary

Fundamentals are solid overall: profitability improved materially in 2025 (net margin rebounded to ~5.7%) and leverage remains manageable with better debt-to-equity (~0.34). Offsetting this, revenue dipped modestly vs. 2024 and both earnings and free-cash-flow have shown notable variability across the period.

Income Statement

Revenue has expanded materially over the cycle (2020–2025), but the most recent year shows a modest decline versus 2024. Profitability improved meaningfully in 2025 with net margin rebounding to ~5.7% from ~2.4% in 2024, while gross margin (~14.8%) and EBITDA margin (~14.8%) remain solid for the sector. That said, margins have been somewhat volatile (notably the 2024 earnings dip), which tempers confidence in consistency.

Balance Sheet

Leverage looks manageable: debt-to-equity improved to ~0.34 in 2025 from ~0.42 in 2024, and equity has grown over time. Returns on equity also strengthened in 2025 (~9.6%) after a weaker 2024 (~4.8%), pointing to better profitability on the capital base. The key watch-out is that total debt remains sizable in absolute dollars, and leverage has trended higher versus earlier years (e.g., 2021), even if it eased in the latest period.

Cash Flow

Cash generation is a clear strength: operating cash flow was ~1.33B in 2025 and free cash flow was positive (~0.91B), with free cash flow covering a large portion of net income (~68%). However, free cash flow growth turned negative in 2025 after a strong 2024, and historical variability is notable (including negative free cash flow in 2023). Operating cash flow coverage is moderate (~0.50 in 2025), suggesting cash conversion is good but not consistently strong.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	10.23B	10.58B	9.73B	7.92B	6.54B
Gross Profit	1.52B	1.50B	1.32B	974.81M	937.65M
EBITDA	1.52B	1.52B	1.27B	986.06M	1.02B
Net Income	584.52M	258.26M	503.05M	426.19M	420.56M
Balance Sheet
Total Assets	10.89B	10.50B	9.85B	8.58B	7.39B
Cash, Cash Equivalents and Short-Term Investments	911.08M	1.05B	653.33M	860.51M	928.43M
Total Debt	2.10B	2.29B	1.77B	1.31B	791.54M
Total Liabilities	4.79B	5.07B	4.53B	3.76B	2.79B
Stockholders Equity	6.10B	5.43B	5.32B	4.81B	4.60B
Cash Flow
Free Cash Flow	909.04M	593.68M	-17.34M	37.06M	666.40M
Operating Cash Flow	1.33B	1.13B	745.37M	447.71M	909.46M
Investing Cash Flow	-837.27M	-1.12B	-1.19B	-715.74M	-267.32M
Financing Cash Flow	-645.50M	363.68M	255.57M	176.81M	-572.77M

Linamar Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 86.66
• 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 TSE:LNR, the sentiment is Neutral. The current price of 86.66 is below the 20-day moving average (MA) of 91.37, below the 50-day MA of 89.50, and above the 200-day MA of 76.91, indicating a neutral trend. The MACD of -0.76 indicates Positive momentum. The RSI at 39.92 is Neutral, neither overbought nor oversold. The STOCH value of 12.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:LNR.

Linamar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WPK	77 Outperform	C$2.64B	14.22	10.45%	7.11%	3.19%	-0.26%
XTC	71 Outperform	C$284.56M	13.48	6.05%	6.21%	-3.53%	-17.19%
LNR	69 Neutral	C$5.15B	8.51	4.01%	1.32%	-5.33%	-57.58%
MG	66 Neutral	C$21.37B	17.79	6.73%	3.69%	0.66%	-0.61%
MRE	63 Neutral	C$674.73M	7.04	-2.64%	1.93%	-7.25%	-143.07%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
NFI	50 Neutral	C$2.25B	-9.31	-48.23%	―	14.40%	-1117.18%