GTX: Rising Demand for Electric and Hybrid Vehicles Will Drive Performance

Analysts have raised Garrett Motion's fair value estimate from $18.75 to $19.00, citing continued strength across global auto markets and product innovation, which are supporting higher growth and margins.

Analyst Commentary

Recent street research reflects a mix of optimism and caution among analysts covering Garrett Motion. Views center on the company's market positioning, growth prospects, and challenges facing its valuation and execution.

• Bullish analysts highlight Garrett Motion's leading market share in turbochargers. This provides a competitive advantage and supports steady revenue streams.
• The company's ongoing product innovation, particularly in battery electric and plug-in hybrid technologies, positions it to capture growth in evolving vehicle markets.
• Strength in the global auto market, including both North America and Europe, is expected to drive higher volumes and support upward price target revisions.
• Development of zero emission technologies and a strong portfolio pipeline are seen as contributors to differentiated, long-term growth and margin expansion.

• Bearish analysts point to the current valuation as mostly fair. This reflects disciplined but not aggressive spending and a competitive industry environment.
• Some believe that despite recent market strength, execution risks remain as the company transitions into emerging sectors like zero emission vehicles.
• Concerns are noted about the company achieving its full potential in newer markets. This could impact whether recent price target increases are ultimately justified.

What's in the News

• Garrett Motion updated its earnings guidance for full year 2025, now projecting net sales of $3.5 billion to $3.6 billion and net income of $265 million to $295 million. Both figures are increased from prior estimates (Key Developments).
• The company completed a major tranche of its buyback program and repurchased 6,710,397 shares for $84.01 million, bringing the total repurchased under the current program to 12,313,410 shares for $135.71 million (Key Developments).
• The board of directors approved a cash dividend increase to $0.08 per share, up $0.02. The dividend is payable to shareholders of record as of December 1, 2025 (Key Developments).

Valuation Changes

• The Fair Value Estimate has increased slightly from $18.75 to $19.00 per share, reflecting updates in growth and margin assumptions.
• The Discount Rate has risen modestly from 8.51 percent to 9.01 percent, suggesting a slightly higher required return for investors.
• The Revenue Growth projection remains essentially flat, holding at 3.46 percent year over year.
• The Net Profit Margin is up incrementally from 9.77 percent to 9.77 percent, indicating improved profitability expectations.
• The future P/E ratio has moved higher from 9.77x to 10.68x, signaling a small uptick in valuation multiples applied to future earnings.