NYSE:LEA

Stock Analysis Report

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 worldwide.

Snowflake

Fundamentals

Good value with adequate balance sheet.


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


Market Performance


7 Day Return

-2.1%

LEA

-3.2%

US Auto Components

-0.5%

US Market


1 Year Return

-19.0%

LEA

-20.1%

US Auto Components

0.9%

US Market

LEA outperformed the Auto Components industry which returned -22.4% over the past year.

LEA underperformed the Market in United States of America which returned 0.7% over the past year.


Share holder returns

LEAIndustryMarket
7 Day-2.1%-3.2%-0.5%
30 Day11.6%12.4%4.8%
90 Day-14.7%-0.03%2.3%
1 Year-17.1%-19.0%-18.9%-20.1%3.1%0.9%
3 Year5.2%0.08%8.3%-3.6%45.5%36.0%
5 Year47.3%37.5%19.6%3.0%62.5%44.7%

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 based on future cash flows and its price relative to the stock market?

37%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Lear's share price is below the future cash flow value, and at a moderate discount (> 20%).

Lear's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Lear is good value based on earnings compared to the US Auto Components industry average.

Lear is good value based on earnings compared to the United States of America market.


Price Based on Expected Growth

Lear is good value based on expected growth next year.


Price Based on Value of Assets

Lear is overvalued based on assets compared to the US Auto Components industry average.


Next Steps

Future Growth

How is Lear expected to perform in the next 1 to 3 years based on estimates from 17 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Lear's revenue is expected to grow by 3.6% yearly, however this is not considered high growth (20% yearly).

Lear's earnings are expected to grow by 10.6% yearly, however this is not considered high growth (20% yearly).

Lear's revenue growth is positive but not above the United States of America market average.

Lear's earnings growth is positive but not above the United States of America market average.

Lear's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

Lear is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).


Next Steps

Past Performance

How has Lear performed over the past 5 years?

14.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Lear's year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.

Lear's 1-year earnings growth is negative, it can't be compared to the 5-year average.

Lear's 1-year earnings growth is negative, it can't be compared to the US Auto Components industry average.


Return on Equity

Lear has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).


Return on Assets

Lear used its assets more efficiently than the US Auto Components industry average last year based on Return on Assets.


Return on Capital Employed

Lear's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Lear's financial position?


Financial Position Analysis

Lear is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Lear's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Lear's level of debt (51.1%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (33.2% vs 51.1% today).

Debt is well covered by operating cash flow (63.6%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 17.3x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 2.9x debt.


Next Steps

Dividend

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

2.50%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Lear's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.44%).

Lear's dividend is below the markets top 25% of dividend payers in United States of America (3.71%).

Whilst dividend payments have been stable, Lear has been paying a dividend for less than 10 years.

Dividend payments have increased, but Lear only paid a dividend in the past 9 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (4.8x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (6.3x coverage).


Next Steps

Management

What is the CEO of Lear's salary, the management and board of directors tenure and is there insider trading?

1.4yrs

Average management tenure


CEO

Ray Scott (54yo)

1.5yrs

Tenure

US$9,936,305

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

Ray's remuneration is higher than average for companies of similar size in United States of America.

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


Management Age and Tenure

1.4yrs

Average Tenure

52.5yo

Average Age

The average tenure for the Lear management team is less than 2 years, this suggests a new team.


Board Age and Tenure

9.1yrs

Average Tenure

65yo

Average Age

The tenure for the Lear board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellUS$546,00020 Feb 19
Shari Burgess
EntityIndividual
Shares3,500
Max PriceUS$156.00
SellUS$2,947,89615 Feb 19
Terrence Larkin
EntityIndividual
Role
Senior Key Executive
Shares18,985
Max PriceUS$155.28
SellUS$106,61819 Nov 18
Richard Bott
EntityIndividual
Shares789
Max PriceUS$135.13

Ownership Breakdown


Management Team

  • Ray Scott (54yo)

    President

    • Tenure: 1.5yrs
    • Compensation: US$9.94m
  • Jeff Vanneste (59yo)

    Senior VP & CFO

    • Tenure: 7.5yrs
    • Compensation: US$4.36m
  • Dave Mullin

    Vice President of Sales & Marketing

    • Tenure: 15yrs
  • Frank Orsini (46yo)

    Executive VP & President of Seating

    • Tenure: 7.9yrs
    • Compensation: US$4.16m
  • Terry Larkin (64yo)

    • Tenure: 0.08yrs
    • Compensation: US$4.20m
  • Tom DiDonato (60yo)

    Senior VP & Chief Administrative Officer

    • Tenure: 0.7yrs
    • Compensation: US$3.47m
  • Amy Doyle (51yo)

    VP & Chief Accounting Officer

    • Tenure: 2.3yrs
  • John Absmeier (44yo)

    Chief Technology Officer

    • Tenure: 1.3yrs
  • Alicia Davis

    Senior Vice President of Corporate Development & Investor Relations

    • Tenure: 1.1yrs
  • Harry Kemp (43yo)

    Senior VP

    • Tenure: 0.08yrs

Board Members

  • Henry Daniel Wallace (73yo)

    Non-Executive Chairman

    • Tenure: 9.1yrs
    • Compensation: US$474.80k
  • Thomas Capo (68yo)

    Independent Director

    • Tenure: 9.8yrs
    • Compensation: US$294.97k
  • Jon Foster (58yo)

    Independent Director

    • Tenure: 9.8yrs
    • Compensation: US$655.49k
  • Kathleen Ligocki (63yo)

    Independent Director

    • Tenure: 7yrs
    • Compensation: US$289.97k
  • Greg Smith (67yo)

    Independent Director

    • Tenure: 9.8yrs
    • Compensation: US$274.97k
  • Ray Scott (54yo)

    President

    • Tenure: 1.5yrs
    • Compensation: US$9.94m
  • Conrad Mallett (65yo)

    Independent Director

    • Tenure: 17.1yrs
    • Compensation: US$274.97k
  • Mei-Wei Cheng (69yo)

    Director

    • Tenure: 0.7yrs
  • Mary Jepsen (54yo)

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$274.97k

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$7.253b
  • Shares outstanding: 61.05m
  • 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 Analysis2019/09/24 00:05
End of Day Share Price2019/09/23 00:00
Earnings2019/06/29
Annual Earnings2018/12/31


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.