Lear (LEA) AI Stock Analysis

• Market Cap: $5.57B
• Dividend Yield: 2.94%
• Average Volume (3M): 640.97K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.74
• Revenue Growth: -1.90%
• EPS Growth: -13.86%
• Country: US
• Employees: 173,700
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 2.79
• Shares Outstanding: 53,206,093
• 10 Day Avg. Volume: 604,914
• 30 Day Avg. Volume: 640,969
• PEG Ratio: -1.37
• Price to Book (P/B): 1.14
• Price to Sales (P/S): 0.22
• P/FCF Ratio: 9.04
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $114.44
• Price Target Upside: 9.35% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

• Rating: 73 Outperform
• Price Target: $113.00 ▲(7.98% Upside)

Lear's overall stock score reflects strong financial performance and attractive valuation, supported by positive earnings call insights. Technical analysis indicates some short-term challenges, but the company's strategic wins and operational improvements provide a solid foundation for future growth.

Positive Factors

Strategic Partnerships

The expanded partnership with Palantir enhances Lear's operational efficiency and innovation capabilities, leveraging AI and data analytics to improve manufacturing processes and manage tariff exposure, which is crucial for long-term competitiveness.

New Business Wins

Securing new contracts with major automotive manufacturers like BMW and Ford strengthens Lear's market position and ensures a steady revenue stream, supporting long-term growth and stability in the competitive auto parts industry.

Cash Flow Management

Strong operating cash flow enables Lear to reinvest in its business and return capital to shareholders, indicating robust financial health and the ability to sustain operations and growth initiatives over the long term.

Negative Factors

Volume and Mix Headwinds

Significant volume and mix headwinds can impact revenue and profitability, posing challenges to maintaining growth momentum and operational efficiency, which may affect Lear's long-term financial performance.

Challenges in Tariff Recovery

Delays in tariff recovery can strain cash flow and affect profitability, highlighting the need for improved cost management strategies to mitigate external economic pressures and sustain financial stability.

Flat Sales and Operating Margins

Flat sales and declining operating margins suggest challenges in scaling operations and maintaining profitability, which could hinder Lear's ability to capitalize on growth opportunities and sustain competitive advantage.

Lear Business Overview & Revenue Model

Company Description

Lear 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 Money

Lear 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 Financial Statement Overview

Summary

Lear demonstrates robust financial performance with consistent revenue growth and stable profitability margins. The balance sheet is well-managed with moderate leverage, and cash flow generation is strong, although there is potential for better free cash flow conversion. The company is well-positioned in the auto parts industry, but should focus on enhancing operational efficiency and profitability to sustain growth.

Income Statement

Lear's income statement shows a solid performance with a consistent revenue growth trend, evidenced by an 8.4% increase in the TTM period. The gross profit margin remains stable around 7%, and the net profit margin has improved slightly to 2.05% in the TTM. However, the EBIT and EBITDA margins have slightly decreased, indicating some pressure on operational efficiency. Overall, the company demonstrates a strong revenue trajectory with room for improvement in operational margins.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.70 in the TTM, indicating a balanced approach to leveraging. Return on equity has slightly decreased to 9.91%, suggesting a need for improved profitability. The equity ratio remains healthy, showing a stable capital structure. While the company maintains a solid financial position, there is potential risk if leverage increases without corresponding growth in equity.

Cash Flow

Lear's cash flow statement indicates a positive free cash flow growth of 8.4% in the TTM, reflecting effective cash management. The operating cash flow to net income ratio is 1.68, suggesting strong cash generation relative to net income. However, the free cash flow to net income ratio has decreased slightly, indicating potential challenges in converting income into free cash flow. Overall, the cash flow position is stable, but there is room for improvement in free cash flow conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.89B	23.31B	23.47B	20.89B	19.26B	17.05B
Gross Profit	1.59B	1.64B	1.84B	1.41B	1.39B	1.11B
EBITDA	1.41B	1.46B	1.66B	1.18B	1.25B	938.80M
Net Income	469.80M	506.60M	572.50M	327.70M	373.90M	158.50M
Balance Sheet
Total Assets	15.32B	14.03B	14.70B	13.76B	13.35B	13.20B
Cash, Cash Equivalents and Short-Term Investments	900.50M	1.06B	1.20B	1.11B	1.32B	1.32B
Total Debt	3.55B	3.50B	2.92B	3.34B	3.25B	2.87B
Total Liabilities	10.11B	9.43B	9.63B	8.93B	8.54B	8.58B
Stockholders Equity	5.08B	4.45B	4.92B	4.68B	4.64B	4.61B
Cash Flow
Free Cash Flow	478.30M	561.40M	622.80M	383.20M	85.00M	210.80M
Operating Cash Flow	1.03B	1.12B	1.25B	1.02B	670.10M	663.10M
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 Price: 104.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 104.65 is above the 20-day moving average (MA) of 100.83, above the 50-day MA of 104.05, and above the 200-day MA of 95.35, indicating a bullish trend. The MACD of 0.29 indicates Negative momentum. The RSI at 59.36 is Neutral, neither overbought nor oversold. The STOCH value of 71.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LEA.

Lear Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALV	―	$8.87B	12.06	31.09%	2.53%	0.84%	26.17%
LEA	―	$5.57B	12.22	9.51%	2.94%	-1.90%	-13.86%
BWA	―	$9.19B	68.84	2.24%	1.16%	0.08%	-83.69%
VC	―	$2.92B	9.62	23.16%	0.25%	-4.03%	-39.51%
LKQ	―	$8.18B	11.86	10.87%	3.85%	-3.71%	-0.27%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DAN	―	$2.66B	45.95	-4.82%	2.03%	-18.23%	―

Lear Corporate Events

Lear Extends $2 Billion Credit Facility to 2030

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.

The most recent analyst rating on (LEA) stock is a Buy with a $170.00 price target. To see the full list of analyst forecasts on Lear stock, see the LEA Stock Forecast page.

Lear Corp’s Earnings Call: Strategic Wins Amid Challenges

Lear Corp’s recent earnings call presented a balanced narrative, highlighting significant operational achievements and strategic market expansions, while also addressing challenges such as flat sales and tariff risks. The company showcased a positive financial outlook, yet acknowledged the hurdles in maintaining growth momentum amidst external pressures.

Lear Corporation Reports Steady Q2 2025 Performance

Lear Corporation, a prominent player in the automotive industry, specializes in the design and manufacturing of advanced seating and electronic systems for major automakers worldwide. Headquartered in Southfield, Michigan, Lear is recognized for its commitment to innovation and operational excellence.