Lear (NYSE:LEA) Stock Crosses Above Fifty Day Moving Average Following Analyst Downgrade

Key Points

• Lear shares rose above their 50-day moving average, reaching $124.30 and last trading near $122.14 after Wall Street Zen upgraded the stock from “hold” to “buy.”
• Despite third-quarter adjusted EPS of $3.71 exceeding estimates, the company’s $5.77 billion revenue fell short of forecasts, and most analysts remain cautious: Lear has an average “hold” rating and a $143.25 price target.
• Lear authorized a $1.5 billion share-repurchase program and pays a quarterly dividend of $0.77, while institutional investors own approximately 97% of its shares.

Lear Corporation (NYSE:LEA - Get Free Report) passed above its 50 day moving average during trading on Monday after Wall Street Zen upgraded the stock from a hold rating to a buy rating. The stock has a 50 day moving average of $122.05 and traded as high as $124.30. Lear shares last traded at $122.1390, with a volume of 737,286 shares traded.

Other analysts also recently issued reports about the stock. Weiss Ratings downgraded shares of Lear from a "buy (b-)" rating to a "hold (c+)" rating in a report on Wednesday, September 9th. BNP Paribas Exane downgraded shares of Lear from an "outperform" rating to a "neutral" rating in a report on Monday, August 3rd. Royal Bank Of Canada cut their price objective on Lear from $143.00 to $139.00 and set a "sector perform" rating for the company in a research report on Monday, October 12th. JPMorgan Chase & Co. lowered Lear from an "overweight" rating to a "neutral" rating and cut their price objective for the company from $175.00 to $150.00 in a research report on Tuesday, September 15th. Finally, UBS Group reduced their target price on Lear from $141.00 to $132.00 and set a "neutral" rating on the stock in a report on Wednesday, October 7th. One research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and twelve have issued a Hold rating to the company's stock. According to data from MarketBeat, the stock has an average rating of "Hold" and an average price target of $143.25.

Insider Activity at Lear

In other news, Director Conrad L. Mallett, Jr. sold 1,646 shares of the 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 approximately $4,489.95. This represents a 97.80% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Corporate insiders own 1.02% of the company's stock.

Lear News Roundup

Here are the key news stories impacting Lear this week:

• Positive Sentiment: Better-than-expected profitability: Lear reported third-quarter adjusted EPS of $3.71, exceeding the $3.32 consensus estimate, while revenue increased 1.6% year over year. Management highlighted growth in revenue, core operating earnings, net income and EPS, supporting the view that the auto supplier is managing a challenging market relatively well. Lear Corp. Earnings Call Highlights Resilient Growth
• Positive Sentiment: Shareholder returns and efficiency initiatives: Lear outlined plans for up to $1.5 billion in share repurchases through 2029. Its Orion automation program is expected to reduce conversion costs by approximately 10% to 15%, which could support margins and long-term earnings growth. Lear Buyback and Orion Automation Plans
• Neutral Sentiment: International revenue remains an important variable: Coverage examining Lear’s international revenue trends indicates that regional performance and global vehicle production will remain key factors in Wall Street’s forecasts. Lear International Revenue Trends
• Neutral Sentiment: Unrelated Learjet crash coverage: Reports about a deadly Florida Learjet crash concern an aircraft brand and are not related to Lear Corporation’s automotive-parts business. The coverage should not have a fundamental effect on LEA.
• Negative Sentiment: Revenue outlook and analyst caution: Lear missed quarterly revenue expectations and reduced its fiscal 2026 revenue guidance. Analysts subsequently lowered forecasts and price targets; RBC cut its target from $139 to $135 while maintaining a “sector perform” rating. Lear Analysts Lower Forecasts

Institutional Trading of Lear

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. VIRGINIA RETIREMENT SYSTEMS ET Al bought a new stake in Lear during the 2nd quarter valued at about $4,029,000. Engineers Gate Manager LP boosted its position in Lear by 145.6% in the 2nd quarter. Engineers Gate Manager LP now owns 126,588 shares of the auto parts company's stock valued at $16,970,000 after buying an additional 75,043 shares during the period. Great Lakes Advisors LLC purchased a new stake in Lear in the 2nd quarter valued at about $2,997,000. Fifth Third Bancorp grew its stake in Lear by 5,987.3% in the 1st quarter. Fifth Third Bancorp now owns 23,436 shares of the auto parts company's stock worth $2,838,000 after acquiring an additional 23,051 shares in the last quarter. Finally, Public Employees Retirement System of Ohio bought a new position in Lear in the 2nd quarter worth about $3,988,000. Hedge funds and other institutional investors own 97.04% of the company's stock.

Lear Trading Up 3.1%

The firm has a market capitalization of $6.02 billion, a PE ratio of 10.67, a price-to-earnings-growth ratio of 0.66 and a beta of 1.29. The stock's 50-day moving average price is $122.05 and its 200 day moving average price is $128.35. 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 (NYSE:LEA - Get Free Report) last announced its quarterly earnings results on Friday, October 30th. The auto parts company reported $3.71 EPS for the quarter, beating the consensus estimate of $3.32 by $0.39. Lear had a return on equity of 14.18% and a net margin of 2.35%. The firm had revenue of $5.77 billion for the quarter, compared to analyst estimates of $5.81 billion. During the same quarter last year, the firm posted $2.79 earnings per share. The business's revenue for the quarter was up 1.6% on a year-over-year basis. On average, sell-side analysts expect that Lear Corporation will post 14.88 EPS for the current fiscal year.

Lear Dividend Announcement

The business also recently announced a quarterly dividend, which was paid on Tuesday, September 22nd. Shareholders of record on Wednesday, September 2nd were given a $0.77 dividend. The ex-dividend date of this dividend was Wednesday, September 2nd. This represents a $3.08 dividend on an annualized basis and a yield of 2.5%. Lear's dividend payout ratio is presently 26.90%.

Lear declared that its board has authorized a share buyback 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 repurchase up to 25.7% of its stock through open market purchases. Share buyback programs are generally an indication that the company's leadership believes its stock is undervalued.

About Lear

Lear Corporation is a global automotive technology company that designs and manufactures products used in passenger vehicles and commercial vehicles. Its operations are 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 support vehicle power management and connectivity.

The company serves automotive manufacturers and their vehicle programs in major markets across North America, Europe, Asia and other regions.

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