Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, electrical distribution systems, and related components primarily to automotive original equipment manufacturers worldwide. It operates through two segments, Seating and Electrical. The company was founded in 1917 and is based in Southfield, Michigan.
LEA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Lear Corp. To summarize, we found that Lear Corp ranked in the 69th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 188.33% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for LEA, they are:
The company has produced more trailing twelve month cash flow than 88.6% of its sector Consumer Cyclical.
Lear Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than just 8.07% of tickers in our DCF set.
LEA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than just 8.07% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
WHR, LKQ, ETH, BWA, and CTIB can be thought of as valuation peers to LEA, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Lear Corporation (NYSE: LEA), a global automotive technology leader in Seating and E-Systems, will hold a conference call to review the company's second quarter 2020 financial results and related matters on August 4, 2020, at 8:30 a.m. EDT.
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Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Lear Corporation and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
SOUTHFIELD, Mich., June 26, 2020 /PRNewswire/ -- Lear Corporation (NYSE: LEA), a global automotive technology leader in Seating and E-Systems, was named a GM Supplier of the Year by General Motors during a virtual ceremony honoring the recipients of the company's 28th annual Supplier of…