Lear (NYSE:LEA) Announces Earnings Results

Lear (NYSE:LEA) posted its earnings results on Friday. The auto parts company reported $3.71 earnings per share for the quarter, topping analysts’ consensus estimates of $3.32 by $0.39, FiscalAI reports. The company had revenue of $5.77 billion during the quarter, compared to analyst estimates of $5.81 billion. Lear had a return on equity of 14.18% and a net margin of 2.35%. Lear’s revenue was up 1.6% on a year-over-year basis. During the same quarter in the prior year, the business earned $2.79 earnings per share.

Here are the key takeaways from Lear’s conference call:

• Third-quarter results improved year over year: sales rose 2% to $5.8 billion despite a 2% decline in Lear-weighted industry production, while core operating earnings increased 6% to $256 million and adjusted EPS climbed 33% to $3.71.
• Lear generated approximately $3.9 billion in year-to-date net business awards, including significant Seating wins with Mahindra, BYD, Mercedes and Jaguar Land Rover, while roughly 70% of E-Systems awards came from new or conquest programs.
• The company highlighted its Orion, Michigan facility as a scalable automation blueprint that is expected to reduce Seating conversion costs by approximately 10% to 15%; Lear also completed its $350 million share-repurchase target early and expanded authorization to $1.5 billion through 2029.
• Lear reduced its full-year revenue outlook by approximately $225 million, primarily because of lower production volumes and worsening consumer demand in China, although it maintained its core operating earnings outlook through restructuring savings, operational improvements and commercial recoveries.
• Management expects ongoing challenges from China, commodities and launch costs, but said it remains confident in delivering targeted net performance improvements in 2027; full 2027 guidance will be provided in February.

Lear Trading Up 0.9%

NYSE:LEA traded up $1.09 on Friday, hitting $118.47. The stock had a trading volume of 841,160 shares, compared to its average volume of 602,615. The stock has a market cap of $5.84 billion, a price-to-earnings ratio of 11.04, a PEG ratio of 0.66 and a beta of 1.29. Lear has a 1-year low of $99.00 and a 1-year high of $150.33. The company has a quick ratio of 1.04, a current ratio of 1.31 and a debt-to-equity ratio of 0.51. The company has a fifty day moving average price of $122.30 and a two-hundred day moving average price of $128.39.

Lear Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Tuesday, September 22nd. Shareholders of record on Wednesday, September 2nd were paid a $0.77 dividend. This represents a $3.08 dividend on an annualized basis and a yield of 2.6%. The ex-dividend date of this dividend was Wednesday, September 2nd. Lear’s dividend payout ratio (DPR) is 28.70%.

Analyst Upgrades and Downgrades

Several equities analysts have issued reports on the stock. Barclays cut their price target on shares of Lear from $155.00 to $145.00 and set an “equal weight” rating on the stock in a report on Friday, October 9th. The Goldman Sachs Group decreased their target price on shares of Lear from $140.00 to $124.00 and set a “buy” rating for the company in a research report on Tuesday, October 6th. Wells Fargo & Company lifted their price objective on Lear from $137.00 to $138.00 and gave the company an “equal weight” rating in a research note on Monday, August 3rd. UBS Group lowered their target price on Lear from $141.00 to $132.00 and set a “neutral” rating on the stock in a research note on Wednesday, October 7th. Finally, JPMorgan Chase & Co. lowered Lear from an “overweight” rating to a “neutral” rating and dropped their target price for the stock from $175.00 to $150.00 in a report on Tuesday, September 15th. One equities research analyst has rated the stock with a Strong Buy rating, three have issued a Buy rating and twelve have issued a Hold rating to the company’s stock. According to MarketBeat, the company has an average rating of “Hold” and a consensus price target of $143.58.

Insider Activity

In other news, Director Conrad L. Mallett, Jr. sold 1,646 shares of Lear stock in a transaction on Thursday, August 6th. The stock was sold at an average price of $121.35, for a total value of $199,742.10. Following the completion of the sale, the director directly owned 37 shares of the company’s stock, valued at approximately $4,489.95. The trade was a 97.80% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this hyperlink. Company insiders own 1.02% of the company’s stock.

Lear announced that its Board of Directors has initiated a share repurchase program on Thursday, September 24th that authorizes the company to repurchase $1.50 billion in shares. This repurchase authorization authorizes the auto parts company to purchase up to 25.7% of its stock through open market purchases. Share repurchase programs are typically a sign that the company’s management believes its shares are undervalued.

Lear News Roundup

Here are the key news stories impacting Lear this week:

• Positive Sentiment: Adjusted EPS beat estimates: Lear reported third-quarter non-GAAP earnings of $3.71 per share, above the $3.32 analyst consensus and up from $2.79 a year earlier. Lear Q3 Earnings Top Estimates
• Positive Sentiment: Profitability and cash generation improved: Third-quarter net income attributable to Lear rose 26% to $136.6 million, while core operating earnings increased to $255.7 million from $241.1 million. Operating cash flow reached $329.3 million. Lear Reports Third Quarter 2026 Results
• Positive Sentiment: Shareholder returns continued: Lear repurchased approximately $175 million of stock and paid $38 million in dividends during the quarter, potentially supporting per-share value and investor sentiment.
• Positive Sentiment: Outlook was maintained: Management kept its full-year core operating earnings outlook and forecast 2026 operating cash flow of $1.225 billion to $1.325 billion, while setting full-year revenue guidance at $23.35 billion to $23.75 billion.
• Neutral Sentiment: Sales growth was modest: Revenue increased roughly 2% year over year to $5.773 billion, but was about $10 million below consensus estimates. The small miss may limit the upside reaction despite the earnings beat. Lear EPS Beats, Revenue Misses
• Negative Sentiment: Insider trading was a cautionary signal: Company insiders made no reported purchases and sold shares in the past six months, including sizable sales by the CEO and CFO. Such activity is not necessarily tied to business fundamentals but may weigh on sentiment.

Lear Company Profile

Lear Corporation is a global automotive technology company that designs and manufactures products used in passenger vehicles and commercial vehicles. Its operations are organized primarily around two areas: seating and e-systems. Lear supplies complete vehicle seating systems, including seats, structures, mechanisms, foam, covers and related components, as well as electrical distribution systems and other technologies that support vehicle power management and connectivity.

The company serves automotive manufacturers and their vehicle programs in major markets across North America, Europe, Asia and other regions.