Garrett Motion (GTX): Valuation in Focus After New Buy Rating and Rising Institutional Interest

Garrett Motion (GTX) is getting fresh attention after Stifel launched coverage on the stock with a Buy rating, joining a chorus of consistently positive recommendations from other firms. Alongside this, institutions now hold around 71% of the company’s shares, and hedge funds have picked up nearly 10%, sending a clear message that big players are engaged. For investors weighing their next steps, this surge of professional interest could feel like both a vote of confidence and a prompt to reassess GTX’s story. This latest round of analyst enthusiasm comes as the stock has notched a 3.9% gain last week and surged 71% over the past year, outpacing many of its peers. Momentum is clearly on the upswing, powered not only by ratings but also by a steady climb in Garrett Motion’s financials, including growth in both annual revenue and net income. With hedge funds potentially steering for near-term value and institutions holding firm, the competitive dynamic around GTX has become hard to ignore. But after this strong run, coupled with institutional and analyst support, should investors see this as an entry point with more room to run, or is the market already pricing in most of Garrett Motion’s future growth?

Most Popular Narrative: 11.6% Undervalued

The leading narrative in the market sees Garrett Motion as trading notably below its calculated fair value, suggesting meaningful upside based on current forecasts and assumptions.

Ongoing innovation and proof-of-concept awards in zero-emission technologies (E-Powertrain, E-Cooling, and fuel cell compressors), along with expansion in industrial and non-automotive end markets, are positioning Garrett to capture higher-margin business opportunities and diversified growth. This is supporting both revenue and future margin expansion.

What is the secret formula behind this bullish target? The narrative’s valuation relies on a unique blend of steady profit growth, operational discipline, and a future earnings multiple well below typical sector giants. Interested in discovering the actual projections and profit assumptions these analysts believe could drive shares higher? The answers, and potentially some surprises, are hidden in the numbers behind this story.

Result: Fair Value of $15.83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, margin pressure from an unfavorable sales mix and the ongoing shift toward electric vehicles could still disrupt Garrett Motion’s projected earnings momentum.

Find out about the key risks to this Garrett Motion narrative.

Another View: SWS DCF Model Puts Valuation to the Test

While analysts focus on price targets based on future earnings, our DCF model approaches the numbers from a different perspective. It still points to undervaluation, but the question remains whether it will stand up to changing market conditions ahead.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Garrett Motion for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Garrett Motion Narrative

If you want a different perspective, or would rather investigate the details directly, you can shape your own view and narrative in just a few minutes. Do it your way

A great starting point for your Garrett Motion research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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