How Lower Loan Costs Could Shape Garrett Motion’s (GTX) Financial Flexibility and Investment Outlook

Simply Wall St
  • Earlier this month, Garrett Motion announced it had amended its credit agreement, reducing interest rates on its U.S. Dollar term loan facility and resetting soft call protection, while keeping other material terms unchanged.
  • This adjustment is expected to lower the company’s interest expenses, potentially boosting cash flow and offering greater financial flexibility amid a changing automotive industry.
  • We'll examine how this reduction in loan costs may affect Garrett Motion's investment outlook and business fundamentals going forward.

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Garrett Motion Investment Narrative Recap

To be a Garrett Motion shareholder, you’d likely need to believe in the company’s ability to generate steady cash flow from turbochargers through the automotive transition, while also expanding zero-emission product lines. The recent reduction in interest costs will marginally ease near-term margin pressure but does not fundamentally alter the biggest short-term catalyst, execution on new program wins for hybrid and backup power segments, or the primary risk around the company’s exposure to internal combustion engine (ICE) markets.

One announcement that stands out is the company’s over US$1 billion in long-term turbo program extensions and new business wins for hybrid and extended range EVs. This provides increased forward revenue visibility, a key factor underpinning near-term stability even as ICE-related uncertainty persists, and aligns strongly with short-term catalysts for sustaining earnings through the sector’s transition.

However, investors should not overlook that margin pressure from unfavorable sales mix remains a material risk as...

Read the full narrative on Garrett Motion (it's free!)

Garrett Motion's narrative projects $3.8 billion revenue and $268.7 million earnings by 2028. This requires 3.1% yearly revenue growth and a $32.3 million decrease in earnings from $301.0 million today.

Uncover how Garrett Motion's forecasts yield a $14.50 fair value, a 10% upside to its current price.

Exploring Other Perspectives

GTX Community Fair Values as at Aug 2025

Simply Wall St Community members have published three fair value estimates for Garrett Motion, spanning US$11.24 to US$31.56 per share. While opinions on fair value vary widely, many focus on the company’s ongoing effort to offset ICE headwinds through new hybrid and electrification wins, which could shape future returns in unpredictable ways.

Explore 3 other fair value estimates on Garrett Motion - why the stock might be worth 15% less than the current price!

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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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