Lear (NYSE:LEA) Raised to "Buy" at Wall Street Zen

Key Points

• Wall Street Zen upgraded Lear to “Buy” from “Hold,” although the broader analyst consensus remains “Hold,” with an average price target of $143.58.
• Lear reported quarterly EPS of $4.28, beating expectations of $3.98, while revenue reached $6.21 billion and increased 3% year over year.
• The company authorized a $1.5 billion share repurchase program, allowing it to buy back up to 25.7% of outstanding shares—potentially signaling that management views the stock as undervalued.

Lear (NYSE:LEA - Get Free Report) was upgraded by Wall Street Zen from a "hold" rating to a "buy" rating in a report released on Saturday, Wall Street Zen reports.

Several other equities research analysts have also recently issued reports on LEA. The Goldman Sachs Group lowered their price objective on shares of Lear from $140.00 to $124.00 and set a "buy" rating for the company in a research report on Tuesday, October 6th. Weiss Ratings lowered shares of Lear from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Wednesday, September 9th. Barclays decreased their price target on shares of Lear from $155.00 to $145.00 and set an "equal weight" rating for the company in a research note on Friday, October 9th. UBS Group lowered their price target on Lear from $141.00 to $132.00 and set a "neutral" rating for the company in a report on Wednesday, October 7th. Finally, Wells Fargo & Company increased their price objective on Lear from $137.00 to $138.00 and gave the stock an "equal weight" rating in a research note on Monday, August 3rd. One analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating and twelve have assigned a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average price target of $143.58.

Lear Stock Performance

Lear stock opened at $119.99 on Friday. The company has a debt-to-equity ratio of 0.51, a current ratio of 1.31 and a quick ratio of 1.04. Lear has a 1-year low of $98.79 and a 1-year high of $150.33. The firm has a market capitalization of $5.92 billion, a P/E ratio of 11.18, a price-to-earnings-growth ratio of 0.74 and a beta of 1.29. The company's 50-day moving average is $123.49 and its 200 day moving average is $130.45.

Lear (NYSE:LEA - Get Free Report) last announced its earnings results on Friday, July 31st. The auto parts company reported $4.28 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.98 by $0.30. Lear had a return on equity of 14.18% and a net margin of 2.35%. The business had revenue of $6.21 billion during the quarter, compared to analyst estimates of $6.15 billion. During the same quarter in the previous year, the business earned $3.06 earnings per share. The company's revenue for the quarter was up 3.0% compared to the same quarter last year. Research analysts forecast that Lear will post 14.86 EPS for the current year.

Lear announced that its board has authorized a share repurchase program on Thursday, September 24th that authorizes the company to repurchase $1.50 billion in outstanding shares. This buyback authorization authorizes the auto parts company to reacquire up to 25.7% of its shares through open market purchases. Stock buyback programs are typically a sign that the company's board of directors believes its stock is undervalued.

Insider Buying and Selling at Lear

In related news, Director Conrad L. Mallett, Jr. sold 1,646 shares of the firm's stock in a transaction dated Thursday, August 6th. The stock was sold at an average price of $121.35, for a total transaction of $199,742.10. Following the sale, the director owned 37 shares of the company's stock, valued at $4,489.95. This trade represents a 97.80% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. 1.02% of the stock is owned by company insiders.

Institutional Trading of Lear

A number of institutional investors have recently made changes to their positions in the business. Bank of New York Mellon Corp acquired a new stake in Lear in the second quarter worth about $65,397,000. Pacer Advisors Inc. grew its position in Lear by 220.9% during the 4th quarter. Pacer Advisors Inc. now owns 258,063 shares of the auto parts company's stock worth $29,574,000 after purchasing an additional 177,632 shares during the last quarter. Diamond Hill Capital Management LLC Investment Advisor purchased a new stake in Lear during the 2nd quarter worth approximately $17,423,000. Dimensional Fund Advisors LP grew its position in Lear by 3.8% during the 1st quarter. Dimensional Fund Advisors LP now owns 2,943,480 shares of the auto parts company's stock worth $356,380,000 after purchasing an additional 107,678 shares during the last quarter. Finally, Assenagon Asset Management S.A. acquired a new position in Lear during the 3rd quarter valued at approximately $11,911,000. Institutional investors and hedge funds own 97.04% of the company's stock.

About Lear

Lear Corporation NYSE: LEA is a global automotive technology supplier that designs and manufactures products used by vehicle manufacturers worldwide. The company's principal business areas are seating systems and e-systems, which support the functionality, comfort, safety and connectivity of modern vehicles.

Lear's seating business provides complete seating systems and related components, including seat structures, mechanisms, foam, trim, covers and comfort technologies. Its e-systems business develops electrical distribution systems, connection systems, electronic components and software-enabled technologies that help manage power, data and connectivity within vehicles.

Founded in 1917 and headquartered in Southfield, Michigan, Lear serves automotive manufacturers through operations and facilities across major vehicle-producing regions, including North America, Europe and Asia.

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