Views of Wall Street’s Leading Experts on Lear Corporation

Lear Corporation (NYSE: LEA) stock fell -5.27% on Friday to $148.00 against a previous-day closing price of $156.23. With 1.04 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.56 million shares. During the session, the Auto Parts company that operates in wider Consumer Cyclical sector, reached to the highest price of $154.95 whereas the lowest price it dropped to was $147.95. The 52-week range on LEA shows that it touched its highest point at $195.43 and its lowest point at $118.38 during that stretch. It currently has a 1-year price target of $158.07. With its current market cap of 8.48 billion, LEA has annualized dividend of $3.08 while the current yield stands at 2.08%. Beta for the stock currently stands at 1.49.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of LEA was down-trending over the past week, with a drop of -1.35%, but this was up by 18.89% over a month. Three-month performance surged to 7.76% while six-month performance fell -13.94%. The stock lost -11.27% in the past year, while it has lost -19.10% so far this year. A look at the trailing 12-month EPS for LEA yields 3.62 with Next year EPS estimates of 15.49. For the next quarter, that number is 1.44. This implies an EPS growth rate of 135.90% for this year and 82.17% for next year. EPS is expected to grow by 49.18% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -14.20%.

Float and Shares Shorts:

At present, 59.93 million LEA shares are outstanding with a float of 59.61 million shares on hand for trading. On Jul 14, 2022, short shares totaled 1.49 million, which was 2.48% higher than short shares on Jun 14, 2022. In addition to Mr. Raymond E. Scott Jr. as the firm’s Pres, CEO & Director, Mr. Jason M. Cardew serves as its Sr. VP & CFO.

Institutional Ownership:

Through their ownership of 103.61% of LEA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 63.47% of LEA, in contrast to 39.75% held by mutual funds. Shares owned by individuals account for 0.62%. As the largest shareholder in LEA with 10.48% of the stake, Pzena Investment Management LLC holds 6,265,529 shares worth 6,265,529. A second-largest stockholder of LEA, The Vanguard Group, Inc., holds 5,407,649 shares, controlling over 9.05% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in LEA, holding 4,987,998 shares or 8.34% stake. With a 2.95% stake in LEA, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 1,761,399 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 2.88% of LEA stock, is the second-largest Mutual Fund holder. It holds 1,723,606 shares valued at 216.98 million. Allspring Special Mid Cap Value F holds 2.74% of the stake in LEA, owning 1,635,800 shares worth 205.93 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for LEA since 20 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 10 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With LEA analysts setting a high price target of $196.00 and a low target of $140.00, the average target price over the next 12 months is $167.69. Based on these targets, LEA could surge 32.43% to reach the target high and fall by -5.41% to reach the target low. Reaching the average price target will result in a growth of 13.3% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. LEA will report FY 2022 earnings on 02/07/2023. Analysts have provided yearly estimates in a range of $10.05 being high and $7.50 being low. For LEA, this leads to a yearly average estimate of $8.70. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Lear Corporation surprised analysts by $0.34 when it reported $1.79 EPS against a consensus estimate of $1.45. The surprise factor in the prior quarter was $0.21. Based on analyst estimates, the high estimate for the next quarter is $2.68 and the low estimate is $1.90. The average estimate for the next quarter is thus $2.25.

Summary of Insider Activity:

Insiders traded LEA stock several times over the past three months with 7 Buys and 7 Sells. In these transactions, 5,260 shares were bought while 21,410 shares were sold. The number of buy transactions has increased to 42 while that of sell transactions has risen to 38 over the past year. The total number of shares bought during that period was 140,466 while 87,977 shares were sold.

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