Light Vehicle Wins Will Shape Prospects Amid ICE Risks
Analysts have raised their price target for Garrett Motion from $14 to $18 per share. They cite ongoing strength in the auto market and the company's strategic expansion into products for plug-in hybrids and zero emission technologies.
Analyst Commentary
Recent analyst actions reflect a generally positive outlook for Garrett Motion, driven by favorable market trends and the company's strategic direction in automotive technologies.
Bullish Takeaways- Bullish analysts highlight that Garrett Motion is positioned to directly benefit from ongoing strength in the automotive market, particularly as demand for battery electric and plug-in hybrid vehicles continues to increase.
- Expanding product offerings tailored to plug-in hybrids and zero emission technologies is seen as a key growth driver, supporting long-term revenue and market share gains.
- Recent sales activity shows promise, as both North American and European markets demonstrate resilience and recovery toward pre-pandemic levels.
- Strong product development initiatives in zero emission technologies are expected to help Garrett Motion deliver differentiated growth and strengthen its position as a vital supplier to automakers and industrial partners.
- Analysts note that significant growth depends on continued strength in consumer demand for plug-in hybrids and electric vehicles. This growth could face headwinds if market preferences shift.
- There are ongoing uncertainties in global economic conditions and supply chain dynamics that may affect the company’s execution and the pace of recovery in Europe.
- Achieving ambitious growth targets for the Zero Emission portfolio will require consistent investment and successful commercialization, which carries execution risk.
What's in the News
- Revised full-year 2025 earnings guidance: Expected net sales are now projected between $3.4 billion and $3.6 billion, and net income is forecast in the range of $233 million to $278 million. Previous guidance was lower in both categories. The outlook also factors in continued investment in research and capital expenditures, efforts to offset inflation, and current market assumptions for the auto industry. (Key Developments)
- 2025 industry forecasts: Light vehicle industry production is projected to be down 3% or flat compared to 2024, while the commercial vehicle industry is expected to remain steady or grow up to 2%. Battery electric vehicle penetration is anticipated at 16% for the year. (Key Developments)
- Share buyback progress: Between April 1 and June 30, 2025, Garrett Motion repurchased 2,391,300 shares for $21.86 million, completing a total buyback of 5,603,013 shares for $51.69 million under the December 2024 program. (Key Developments)
Valuation Changes
- Fair Value: Remains unchanged at $17.17 per share, indicating stability in fundamental valuation estimates.
- Discount Rate: Has risen slightly from 8.74% to 8.79%, suggesting a marginally higher perceived investment risk.
- Revenue Growth: Remains essentially flat, moving from 3.01% to 3.01%, reflecting consistent growth expectations.
- Net Profit Margin: Remains largely unchanged at 8.68%, indicating steady profit outlooks.
- Future P/E: Increased modestly from 11.36x to 11.38x, pointing to a minor uptick in projected earnings multiples.
Disclaimer
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