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Lear (LEA) AI Stock Analysis

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LEA

Lear

(NYSE:LEA)

Select Model
Rating:69Neutral
Price Target:$130.00â–²(13.94% Upside)
Action:reiterated
Date:10/31/26

The score is driven primarily by solid (but margin-constrained) financial performance and a constructive earnings update highlighting improving earnings, strong business awards, and higher restructuring savings. Attractive valuation (low P/E with a ~2.6% yield) supports the rating, while weaker technical momentum and the call’s near-term risks (China softness, reduced revenue outlook, and cash-flow variability) temper upside.

Positive Factors
Strong program awardsLarge awards provide a durable revenue foundation because Lear typically supplies components throughout a vehicle model cycle. The high share of new and conquest programs also supports future platform penetration, broadens customer relationships, and can offset weaker production in existing programs.
Negative Factors
Thin and declining marginsLow and declining margins leave limited room to absorb labor, commodity, launch, or pricing pressure before profitability is affected. This constrains the conversion of revenue growth into earnings and makes Lear’s medium-term results more sensitive to operational execution and industry volumes.

Lear Key Performance Indicators (KPIs)

Net Sales By SegmentReveals revenue contributions from various business segments, helping investors understand which areas are performing well and which might need strategic adjustments.

$0.00$2.00B$4.00B$6.00BApr 21Jul 21Oct 21Dec 21Apr 22Jul 22Oct 22Dec 22Apr 23Jul 23Sep 23Dec 23Mar 24Jul 24Sep 24Dec 24Mar 25Jun 25Sep 25Dec 25Apr 26Jul 26
Chart Insights

Seating is the clear growth engine—consistent wins, backlog expansion and net‑performance/automation are driving most of Lear’s sales momentum and margin gains—whereas E‑Systems is delivering only modest top‑line growth but improving profitability as operational fixes take hold. Management’s Q1 awards and backlog underpin upside, but tariff-related revenue reductions and China/EV production timing mean reported sales understate underlying demand; the stock’s upside depends on converting late‑cycle program launches and sustaining margin improvements, not just headline sales figures.

Data provided by:The Fly

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

-10%0%10%20%30%40%LEA+6.90%SPY+8.73%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
Market Cap
$5.50B
Dividend Yield
2.70%
Average Volume (3M)
573.07K
Price to Earnings (P/E)
9.9
Beta (1Y)
0.56
Revenue Growth
3.52%
EPS Growth
40.59%
Country
US
Employees
164,300
Sector
Consumer Cyclical
Sector Strength
61
Industry
Auto - Parts

Lear Business Overview & Revenue Model

Company Description

Lear Corporation, established in 1917 and headquartered in Southfield, Michigan, stands as a premier global supplier to the automotive industry. The company specializes in the conceptualization, development, engineering, manufacturing, and assembly o...

How the Company Makes Money

Lear makes money by supplying automotive components and systems to vehicle manufacturers under awarded vehicle programs, generating revenue largely from the sale of (1) seating systems and components and (2) vehicle electrical distribution and connec...

Lear Earnings Call Summary

Earnings Call Date:Oct 29, 2026(Q3-2026)|% Change Since:-2.79%|Next Earnings Date:Feb 08, 2027
Earnings Call SentimentPositive

The call was strongly positive overall. Lear reported year-over-year growth in sales, core operating earnings, adjusted EPS and margins despite lower global vehicle production, secured approximately $3.9 billion of year-to-date awards, increased its restructuring savings outlook and maintained full-year core operating earnings guidance. The principal challenges were deteriorating China demand, reduced revenue guidance, lower quarterly operating cash flow, production declines, restructuring investment and commodity-related pressures, but management stated that savings and operational execution were expected to offset these factors.

Positive Updates

Revenue and Core Operating Earnings Growth
Third-quarter sales increased 2% year over year to $5.8 billion despite global industry production declining by 2% on a Lear-weighted basis. Core operating earnings were $256 million, up 6% year over year and representing the fourth consecutive quarter of year-over-year improvement.

Negative Updates

Global Automotive Production Declined
Global production was down 2% year over year on a Lear-weighted basis. Production volumes declined by 5% in North America and 7% in China, while Europe increased 1%.

Company Guidance

For 2026, the midpoint of the guidance range assumes global industry production will be down 1% on a Lear sales weighted basis compared to 2025, an average euro exchange rate of $1.15 per euro and an average Chinese RMB exchange rate of 6.80 RMB for the dollar; the revenue midpoint was reduced by approximately $225 million, restructuring cost outlook was increased by $25 million, and the company is maintaining its full year outlook for core operating earnings while adjusting its outlook for operating cash flow and free cash flow. Restructuring savings guidance increased from $80 million to $95 million, Seating is expected to deliver a full year target of 40 basis points, and E-Systems is expected to deliver positive net performance in the fourth quarter. For 2027, 40 and 80 basis points in net performance in Seating and E-Systems respectively are still tracking or right on track, with the company expecting to do a little better than that in both segments this year; typical conversion rates are 20% range for wind down, 10% range for backlog, and 15% to 25% rate for volume and mix. By 2029, the company sees significant growth above market, with both segments returning to the historical targeted range of 3% to 4% in seating and 4% to 6% in these systems.

Lear Financial Statement Overview

Summary

Fundamentals are solid but not standout: revenue and net income are improving in TTM, leverage is moderate and trending better (debt-to-equity ~0.70), and operating/free cash flow are positive. The main constraints are thin and drifting-lower margins (gross margin ~7%, EBITDA margin ~5.5%) and a notable decline in TTM free cash flow (~-17.5%), which increases sensitivity to cyclical volume and cost swings.

Income Statement

72Positive

Balance Sheet

74Positive

Cash Flow

63Positive
Financial statement breakdown
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue23.79B23.26B23.30B23.46B20.88B19.26B
Gross Profit1.68B1.91B1.84B1.75B1.57B1.49B
EBITDA1.32B1.38B1.46B1.48B1.18B1.25B
Net Income584.40M436.80M506.60M572.50M327.70M373.90M
Balance Sheet
Total Assets15.27B14.84B14.03B14.70B13.76B13.35B
Cash, Cash Equivalents and Short-Term Investments889.40M1.04B1.06B1.20B1.12B1.32B
Total Debt3.51B4.10B4.08B3.55B3.34B3.25B
Total Liabilities10.13B9.64B9.43B9.63B8.93B8.54B
Stockholders Equity5.00B5.04B4.45B4.92B4.68B4.64B
Cash Flow
Free Cash Flow700.80M527.20M561.40M622.80M383.20M85.00M
Operating Cash Flow1.36B1.09B1.12B1.25B1.02B670.10M
Investing Cash Flow-645.50M-516.80M-543.00M-761.50M-830.30M-646.70M
Financing Cash Flow-848.60M-618.50M-693.90M-419.50M-387.30M-13.60M

Lear Technical Analysis

Technical Analysis SentimentNegative
Last Price114.10

Price Trends

50DMA121.58Negative
100DMA126.97Negative
200DMA127.34Negative

Market Momentum

MACD-1.18Negative
RSI39.80Neutral
STOCH29.33Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEA, the sentiment is Negative. The current price of 114.10 is below the 20-day moving average (MA) of 118.32, below the 50-day MA of 121.58, and below the 200-day MA of 127.34, indicating a bearish trend. The MACD of -1.18 indicates Negative momentum. The RSI at 39.80 is Neutral, neither overbought nor oversold. The STOCH value of 29.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LEA.

Lear Risk Analysis

Lear disclosed 30 risk factors in its most recent earnings report. Lear reported the most risks in the "Production" category.

Higher RiskSector Avg.Lower RiskFinance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Production - Risks related to the company’s ability to manufacture goods and services

Latest Risks Added

0 New Risks

Lear Peers Comparison

Overall Rating

UnderperformOutperform
Sector (61)

Financial Indicators

LEA against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
LEALEA69Neutral$5.72B9.9411.52%2.70%3.52%40.59%
ALVALV67Neutral$9.05B14.8224.54%2.81%4.26%-13.85%
Sector *61Neutral$18.38B12.79-2.54%3.03%1.52%-15.83%
VCVC59Neutral$1.98B20.886.44%1.81%1.94%-67.19%
GNTXGNTX53Neutral$4.39B10.9215.85%2.38%7.71%9.67%
ADNTADNT48Neutral$1.33B-71.13-1.00%―4.36%93.02%
APTVAPTV47Neutral$8.76B11.288.55%―-5.40%-75.68%

* Consumer Cyclical Sector Average

Performance Comparison

-40%-20%0%20%40%LEAALVAPTVGNTXVCADNTDec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
LEA and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
LEALear Corp.114.108.668.22%
ALVAutoliv124.035.344.50%
APTVAptiv PLC40.85-29.09-41.59%
GNTXGentex Corp20.21-2.61-11.45%
VCVisteon77.48-28.30-26.75%
ADNTAdient plc17.07-2.65-13.44%

Lear Corporate Events

Business Operations and StrategyExecutive/Board Changes

Lear Announces Planned Chief Financial Officer Transition

Positive
Oct 19, 2026

On October 19, 2026, Lear Corporation announced a planned chief financial officer transition following a succession process, underscoring the company’s focus on leadership continuity and financial discipline. Longtime executive Jason Cardew, CF...

Business Operations and StrategyStock Buyback

Lear boosts share repurchase authorization, affirms cash strategy

Positive
Sep 24, 2026

On September 24, 2026, Lear Corporation announced that its board approved an increase of the company’s share repurchase authorization to $1.5 billion and extended the program’s term to December 31, 2029. The move reflects the board’...

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: Oct 31, 2026