Lear (NYSE:LEA) Board Approves Stock Repurchase Plan

Key Points

• Lear’s board approved a $1.5 billion share repurchase program, authorizing the company to buy back up to 25.7% of its outstanding shares through open-market purchases.
• Lear reported quarterly adjusted earnings of $4.28 per share, beating estimates of $3.98, while revenue rose 3% year over year to $6.21 billion. The company also maintains a quarterly dividend of $0.77 per share, yielding approximately 2.5% annually.
• Analyst sentiment remains cautious, with the stock carrying an average rating of “Hold” and an average price target of $146.33; several firms recently downgraded or lowered their targets.

Lear (NYSE:LEA - Get Free Report) declared that its board has approved a share repurchase program on Thursday, September 24th, RTT News reports. The company plans to repurchase $1.50 billion in shares. This repurchase authorization allows the auto parts company to reacquire up to 25.7% of its shares through open market purchases. Shares repurchase programs are usually an indication that the company's board of directors believes its stock is undervalued.

Lear Stock Performance

Shares of Lear stock traded up $4.58 during trading on Friday, hitting $122.83. 622,503 shares of the stock were exchanged, compared to its average volume of 644,063. The company has a debt-to-equity ratio of 0.51, a quick ratio of 1.04 and a current ratio of 1.31. Lear has a 12 month low of $96.04 and a 12 month high of $150.33. The stock's fifty day moving average is $128.52 and its 200 day moving average is $130.24. The stock has a market cap of $6.06 billion, a PE ratio of 11.45, a P/E/G ratio of 0.72 and a beta of 1.26.

Lear (NYSE:LEA - Get Free Report) last issued its quarterly earnings data on Friday, July 31st. The auto parts company reported $4.28 earnings per share for the quarter, beating the consensus estimate of $3.98 by $0.30. Lear had a net margin of 2.35% and a return on equity of 14.18%. The firm had revenue of $6.21 billion for the quarter, compared to the consensus estimate of $6.15 billion. During the same period last year, the firm posted $3.06 EPS. Lear's quarterly revenue was up 3.0% compared to the same quarter last year. As a group, sell-side analysts anticipate that Lear will post 14.86 EPS for the current year.

Lear Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, September 22nd. Stockholders of record on Wednesday, September 2nd were given a dividend of $0.77 per share. The ex-dividend date was Wednesday, September 2nd. This represents a $3.08 annualized dividend and a dividend yield of 2.5%. Lear's payout ratio is currently 28.70%.

Analyst Upgrades and Downgrades

A number of analysts have weighed in on LEA shares. Wall Street Zen cut shares of Lear from a "buy" rating to a "hold" rating in a report on Sunday, September 20th. Weiss Ratings downgraded shares of Lear from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Wednesday, September 9th. The Goldman Sachs Group reissued a "neutral" rating and issued a $140.00 target price on shares of Lear in a report on Saturday, August 1st. Barclays lifted their target price on Lear from $150.00 to $155.00 and gave the company an "equal weight" rating in a research note on Thursday, July 9th. Finally, JPMorgan Chase & Co. reiterated a "neutral" rating and set a $150.00 price target (down from $175.00) on shares of Lear in a research report on Tuesday, September 15th. One investment analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and twelve have assigned a Hold rating to the company. According to MarketBeat.com, the company currently has an average rating of "Hold" and an average price target of $146.33.

Insider Transactions at Lear

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

About Lear

Lear Corporation is a global automotive technology company that designs and manufactures systems and components used in passenger vehicles. Its business is organized primarily around two areas: seating and E-Systems. Lear supplies complete vehicle seating systems, including seats, structures, mechanisms, foam, covers and related components, as well as electrical distribution systems and other technologies that help manage power, data and connectivity within vehicles.

The company's E-Systems offerings include low- and high-voltage wiring systems, connection systems, battery and power-management solutions, electronic control modules, displays and software-enabled technologies.

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