Adient (NYSE:ADNT) Shares Gap Up Following Strong Earnings

Key Points

• Shares jumped after an earnings beat: Adient reported Q EPS of $0.52 versus $0.44 expected and revenue of $3.87B versus $3.62B expected (revenue up 7% YoY), prompting the stock to open at $22.94 vs. the prior close of $20.67 and trade up roughly 4.9%.
• Analyst views are mixed — the firm has four Buy, six Hold and two Sell ratings, yielding a MarketBeat consensus of "Hold" with a consensus target of $27.56, although Citigroup upgraded to Buy with a $33 target.
• High institutional ownership but challenged profitability: Institutions own about 92.44% of shares; however Adient has a negative net margin and negative P/E (market cap ~$1.7B) and a debt/equity ratio around 1.17.

Adient (NYSE:ADNT - Get Free Report)'s share price gapped up prior to trading on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $20.67, but opened at $22.94. Adient shares last traded at $22.2470, with a volume of 81,356 shares traded.

The company reported $0.52 EPS for the quarter, topping analysts' consensus estimates of $0.44 by $0.08. Adient had a positive return on equity of 8.18% and a negative net margin of 2.06%.The company had revenue of $3.87 billion during the quarter, compared to analysts' expectations of $3.62 billion. During the same quarter in the previous year, the firm earned $0.69 EPS. Adient's revenue was up 7.0% on a year-over-year basis.

Analyst Upgrades and Downgrades

ADNT has been the subject of a number of research analyst reports. Deutsche Bank Aktiengesellschaft reissued a "hold" rating on shares of Adient in a report on Friday, April 17th. Bank of America initiated coverage on Adient in a report on Wednesday, March 4th. They set an "underperform" rating and a $22.00 price target for the company. JPMorgan Chase & Co. lowered their price target on Adient from $28.00 to $26.00 and set a "neutral" rating for the company in a report on Thursday, April 23rd. Morgan Stanley boosted their price target on Adient from $20.00 to $22.00 and gave the stock an "equal weight" rating in a report on Thursday, February 5th. Finally, Citigroup raised Adient from a "neutral" rating to a "buy" rating and boosted their price target for the stock from $30.00 to $33.00 in a report on Wednesday, April 15th. Four analysts have rated the stock with a Buy rating, six have assigned a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat.com, the company has a consensus rating of "Hold" and a consensus target price of $27.56.

Hedge Funds Weigh In On Adient

A number of institutional investors and hedge funds have recently bought and sold shares of ADNT. Royal Bank of Canada increased its holdings in Adient by 11.6% in the 1st quarter. Royal Bank of Canada now owns 22,429 shares of the company's stock worth $289,000 after purchasing an additional 2,331 shares in the last quarter. AQR Capital Management LLC increased its holdings in Adient by 171.1% in the 1st quarter. AQR Capital Management LLC now owns 238,913 shares of the company's stock worth $2,977,000 after purchasing an additional 150,792 shares in the last quarter. Dynamic Technology Lab Private Ltd acquired a new position in Adient in the 1st quarter worth about $236,000. First Trust Advisors LP increased its stake in shares of Adient by 6.8% in the second quarter. First Trust Advisors LP now owns 273,823 shares of the company's stock valued at $5,329,000 after buying an additional 17,400 shares during the period. Finally, Amundi acquired a new stake in shares of Adient in the second quarter valued at about $269,000. Institutional investors and hedge funds own 92.44% of the company's stock.

Adient Trading Up 4.9%

The company has a market cap of $1.70 billion, a price-to-earnings ratio of -6.08, a PEG ratio of 0.47 and a beta of 1.48. The firm has a 50 day moving average price of $21.27 and a two-hundred day moving average price of $21.33. The company has a quick ratio of 0.88, a current ratio of 1.09 and a debt-to-equity ratio of 1.17.

Adient Company Profile

Adient plc NYSE: ADNT is a leading global supplier of automotive seating and interior components. Established in 2016 through a spin-off from Johnson Controls, the company designs, engineers and manufactures complete seat assemblies, seat structures, mechanisms, foams, textiles, trim and electronics. Adient's product portfolio spans a wide range of seating solutions, from entry-level designs to luxury and high-performance seats, and extends to interior modules such as door panels and center consoles.

Serving major original equipment manufacturers (OEMs) around the world, Adient works closely with automakers to develop lightweight, comfortable and safety-oriented seating systems.

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