NYSE:LEA

Stock Analysis Report

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Executive Summary

Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufacturers in North America, Europe, Africa, Asia, South America, and internationally. More Details


Snowflake Analysis

Mediocre balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Lear's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LEA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.1%

LEA

1.2%

US Auto Components

-1.4%

US Market


1 Year Return

8.5%

LEA

5.0%

US Auto Components

17.8%

US Market

Return vs Industry: LEA exceeded the US Auto Components industry which returned 4.7% over the past year.

Return vs Market: LEA underperformed the US Market which returned 18.5% over the past year.


Shareholder returns

LEAIndustryMarket
7 Day3.1%1.2%-1.4%
30 Day25.0%15.5%4.7%
90 Day15.6%15.1%8.2%
1 Year9.9%8.5%6.1%5.0%20.5%17.8%
3 Year-19.0%-23.0%-11.3%-20.8%42.2%32.7%
5 Year15.9%7.7%21.9%2.5%83.4%62.7%

Price Volatility Vs. Market

How volatile is Lear's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lear undervalued compared to its fair value and its price relative to the market?

25.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LEA ($132.26) is trading below our estimate of fair value ($179.61)

Significantly Below Fair Value: LEA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LEA is poor value based on its PE Ratio (51.9x) compared to the US Auto Components industry average (38.6x).

PE vs Market: LEA is poor value based on its PE Ratio (51.9x) compared to the US market (19x).


Price to Earnings Growth Ratio

PEG Ratio: LEA is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: LEA is overvalued based on its PB Ratio (2x) compared to the US Auto Components industry average (1.9x).


Next Steps

Future Growth

How is Lear forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

40.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LEA's forecast earnings growth (40.1% per year) is above the savings rate (2.2%).

Earnings vs Market: LEA's earnings (40.1% per year) are forecast to grow faster than the US market (22.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LEA's revenue (10% per year) is forecast to grow slower than the US market (10.1% per year).

High Growth Revenue: LEA's revenue (10% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LEA's Return on Equity is forecast to be low in 3 years time (16.4%).


Next Steps

Past Performance

How has Lear performed over the past 5 years?

-2.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LEA has a large one-off loss of $277.5M impacting its July 4 2020 financial results.

Growing Profit Margin: LEA's current net profit margins (0.9%) are lower than last year (4.4%).


Past Earnings Growth Analysis

Earnings Trend: LEA's earnings have declined by 2.5% per year over the past 5 years.

Accelerating Growth: LEA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LEA had negative earnings growth (-82.5%) over the past year, making it difficult to compare to the Auto Components industry average (-18.5%).


Return on Equity

High ROE: LEA's Return on Equity (4.8%) is considered low.


Next Steps

Financial Health

How is Lear's financial position?


Financial Position Analysis

Short Term Liabilities: LEA's short term assets ($6.0B) exceed its short term liabilities ($4.8B).

Long Term Liabilities: LEA's short term assets ($6.0B) exceed its long term liabilities ($3.4B).


Debt to Equity History and Analysis

Debt Level: LEA's debt to equity ratio (81.2%) is considered high.

Reducing Debt: LEA's debt to equity ratio has increased from 66.7% to 81.2% over the past 5 years.

Debt Coverage: LEA's debt is not well covered by operating cash flow (15.8%).

Interest Coverage: LEA's interest payments on its debt are well covered by EBIT (6.1x coverage).


Balance Sheet


Next Steps

Dividend

What is Lear current dividend yield, its reliability and sustainability?

0.85%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate LEA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate LEA's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LEA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LEA's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: LEA is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LEA's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Ray Scott (55 yo)

2.58yrs

Tenure

US$13,718,257

Compensation

Mr. Raymond E. Scott Jr., also known as Ray, serves as President, Chief Executive Officer and Director at Lear Corporation since 2019 and had been its Interim President of E-Systems since February 2019 unt ...


CEO Compensation Analysis

Compensation vs Market: Ray's total compensation ($USD13.72M) is above average for companies of similar size in the US market ($USD7.32M).

Compensation vs Earnings: Ray's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Raymond Scott
President2.58yrsUS$13.72m0.060%
$ 4.9m
Jason Cardew
Senior VP & CFO0.92yrUS$2.67m0.010%
$ 808.5k
Thomas DiDonato
Senior VP & Chief Administrative Officer1.75yrsUS$3.99m0.049%
$ 4.0m
Frank Orsini
Executive VP & President of Seating9yrsUS$4.83m0.052%
$ 4.2m
Carl Esposito
Senior VP & President of E-Systems Division1.08yrsUS$6.78mno data
Amy Doyle
VP & Chief Accounting Officer3.42yrsno data0.00035%
$ 28.3k
John Absmeier
Chief Technology Officer2.33yrsno datano data
Alicia Davis
Senior Vice President of Corporate Development & Investor Relations2.17yrsno data0.0024%
$ 192.2k
Harry Kemp
Senior VP1.17yrsno data0.00078%
$ 63.0k
Dave Mullin
Vice President of Sales & Marketing16.08yrsno datano data
Rashida Thomas
Chief Diversity Officer & Director of Talent Management2.42yrsno datano data
Shari Burgess
VP & Treasurer18.17yrsno data0.0060%
$ 483.0k

2.4yrs

Average Tenure

51yo

Average Age

Experienced Management: LEA's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Raymond Scott
President2.58yrsUS$13.72m0.060%
$ 4.9m
Thomas Capo
Independent Director10.92yrsUS$296.98k0.00023%
$ 18.6k
Jonathan Foster
Independent Director10.92yrsUS$296.98k0.016%
$ 1.3m
Kathleen Ligocki
Independent Director8.08yrsUS$289.98k0.0045%
$ 365.9k
Gregory Smith
Independent Non-Executive Chairman0.42yrUS$276.98k0.019%
$ 1.6m
Conrad Mallett
Independent Director18.17yrsUS$274.98k0%
$ 0
Mei-Wei Cheng
Independent Director1.75yrsUS$328.24k0.00061%
$ 49.3k
Bradley Halverson
Director0.33yrno datano data
Mary Jepsen
Independent Director4.58yrsUS$274.98k0.0059%
$ 473.3k

4.6yrs

Average Tenure

64yo

Average Age

Experienced Board: LEA's board of directors are considered experienced (4.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Lear Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Lear Corporation
  • Ticker: LEA
  • Exchange: NYSE
  • Founded: 1917
  • Industry: Auto Parts and Equipment
  • Sector: Automobiles
  • Market Cap: US$8.077b
  • Shares outstanding: 59.94m
  • Website: https://www.lear.com

Number of Employees


Location

  • Lear Corporation
  • 21557 Telegraph Road
  • Southfield
  • Michigan
  • 48033
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LEANYSE (New York Stock Exchange)YesCommon StockUSUSDNov 2009
LE6NDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2009
LEA *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNNov 2009
0JTQLSE (London Stock Exchange)YesCommon StockGBUSDNov 2009

Biography

Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufac ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/23 00:01
End of Day Share Price2020/10/22 00:00
Earnings2020/07/04
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.