Auto parts supplier Lear beats Q2 revenue estimates

Overview

• Lear Q2 revenue of $6.0 bln beats analyst expectations, per LSEG data

• Adjusted EPS for Q2 exceeds estimates, indicating strong operational performance

• Co awarded new seat programs with BMW, Ford, and global EV automakers

Outlook

• Lear sees full-year revenue between $22,470 mln and $23,070 mln

• Company expects core operating earnings of $955 mln to $1,095 mln

• Lear anticipates adjusted EBITDA of $1,570 mln to $1,710 mln

• Company projects free cash flow of $420 mln to $520 mln

Result Drivers

• OPERATING PERFORMANCE - Strong performance in Seating and E-Systems segments contributed to solid margins

• NEW BUSINESS - Addition of new business partially offset lower production on key Lear platforms

• AUTOMATION INVESTMENTS - Investments in automation and restructuring expected to drive sustainable margin improvement, per CEO Ray Scott

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 7 "strong buy" or "buy", 10 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the auto, truck & motorcycle parts peer group is "hold."

• Wall Street's median 12-month price target for Lear Corp is $113.50, about 4.7% above its July 24 closing price of $108.14

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 7 three months ago

Press Release: ID:nPnb5Qjlva