Bank of America has boosted its price target for Lear Corporation (NYSE: LEA) from $110 to $115, citing strong financial performance and positive market momentum. The new target reflects a potential upside of over 26% from the stock’s current price of $90.68.
Analyst sentiment improves despite mixed market outlook
Lear, a key player in automotive seating and electrical systems, has garnered renewed attention from analysts following better-than-expected Q1 earnings. The stock is now rated “buy” by Bank of America, with similar confidence expressed by Citigroup, which has set a $123 price target. Other firms, including UBS and Wells Fargo, have also adjusted their targets upward.
Key analyst ratings:
- Bank of America: Raised from $110 to $115 (“Buy”)
- Citigroup: Initiated coverage at $123 (“Buy”)
- Wells Fargo: Raised from $89 to $100 (“Equal Weight”)
- UBS: Raised from $83 to $95 (“Neutral”)
- MarketBeat average: $107.09 across 14 ratings (5 Buy, 8 Hold, 1 Sell)
Q1 earnings beat expectations
Lear’s Q1 earnings report on May 6 exceeded Wall Street forecasts:
- EPS: $3.12 vs. $2.64 expected
- Revenue: $5.56 billion vs. $5.47 billion expected
- YoY revenue change: -7.2%
- P/E ratio: 10.63
- PEG ratio: 0.51
Despite a dip in revenue, Lear’s profit margins and return on equity remain above industry averages, signaling efficient operations in a tough macroeconomic environment.
Insider activity and institutional interest
Director Conrad L. Mallett, Jr. sold 1,187 shares on June 16 for a total of $110,224. Insiders currently hold 0.91% of outstanding stock, while institutional ownership remains dominant at over 97%. Major investors like Allspring Global, TD Cowen, and Principal Securities have all increased their holdings.
Financial metrics and valuation insights
Lear maintains a solid balance sheet:
- Net margin: 2.09%
- ROE: 14.53%
- Debt-to-equity: 0.57
- Current ratio: 1.32
- Beta: 1.29
The stock’s 50-day and 200-day moving averages are $87.68 and $92.00 respectively, showing relative price stability. Year-to-date, LEA is down just 0.56%.
What happens next
With analyst upgrades, solid fundamentals, and institutional backing, Lear stock appears positioned for a potential rebound. However, continued performance will hinge on global auto demand and margin resilience amid economic headwinds.
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