An analyst sees good growth prospects for Lear Corporation (LEA)

Lear Corporation (NYSE: LEA) stock jumped 0.20% on Thursday to $124.36 against a previous-day closing price of $124.11. With 0.68 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.58 million shares. During the session, the Auto Parts company that operates in wider Consumer Cyclical sector, reached to the highest price of $125.12 whereas the lowest price it dropped to was $123.45. The 52-week range on LEA shows that it touched its highest point at $158.44 and its lowest point at $114.67 during that stretch. It currently has a 1-year price target of $151.08. With its current market cap of 7.29 billion, LEA has annualized dividend of $3.08 while the current yield stands at 2.48%. Beta for the stock currently stands at 1.54.

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 up-trending over the past week, with a rise of 0.05%, but this was down by -5.05% over a month. Three-month performance dropped to -11.23% while six-month performance fell -14.09%. The stock lost -2.78% in the past year, while it has gained 0.27% so far this year. A look at the trailing 12-month EPS for LEA yields 7.07 with Next year EPS estimates of 15.79. For the next quarter, that number is 2.64. This implies an EPS growth rate of -11.60% for this year and 43.45% for next year. EPS is expected to grow by 35.33% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -20.10%.

Float and Shares Shorts:

At present, 59.32 million LEA shares are outstanding with a float of 58.98 million shares on hand for trading. On May 14, 2023, short shares totaled 1.72 million, which was 2.91% higher than short shares on Apr 13, 2023. 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 102.82% of LEA’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 58.39% of LEA, in contrast to 45.68% held by mutual funds. Shares owned by individuals account for 0.62%. As the largest shareholder in LEA with 11.40% of the stake, Pzena Investment Management LLC holds 6,742,800 shares worth 6,742,800. A second-largest stockholder of LEA, The Vanguard Group, Inc., holds 5,650,052 shares, controlling over 9.56% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in LEA, holding 5,349,601 shares or 9.05% stake. With a 3.12% stake in LEA, the iShares Core S&P Mid Cap ETF is the largest stakeholder. A total of 1,845,164 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 3.11% of LEA stock, is the second-largest Mutual Fund holder. It holds 1,839,643 shares valued at 234.85 million. St. James’s Place Unit Trust – Gl holds 2.55% of the stake in LEA, owning 1,504,977 shares worth 192.13 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 31, 2023, LEA reported revenue of $5.07B and operating income of $144.10M. The EBITDA in the recently reported quarter was $281.30M and diluted EPS was $1.14.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for LEA since 0 analysts follow the stock currently. 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 $173.00 and a low target of $133.00, the average target price over the next 12 months is $152.46. Based on these targets, LEA could surge 39.11% to reach the target high and rise by 6.95% to reach the target low. Reaching the average price target will result in a growth of 22.6% 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.

Summary of Insider Activity:

Insiders traded LEA stock several times over the past three months with 1 Buys and 2 Sells. In these transactions, 53 shares were bought while 19,260 shares were sold. The number of buy transactions has increased to 36 while that of sell transactions has risen to 48 over the past year. The total number of shares bought during that period was 127,234 while 164,075 shares were sold.