Lear Corporation (LEA, Financial) reported its first-quarter revenue for 2025 at $5.56 billion, surpassing the consensus estimate of $5.51 billion. The company attributes its solid performance to effective operational improvements, resulting in improved year-over-year margins across its business units, even in the face of reduced industry production in key markets. Despite uncertainties caused by changes in global tariffs, which have complicated forecasting and increased supply chain costs, Lear remains committed to maintaining its competitive edge.
Under the leadership of President and CEO Ray Scott, Lear is collaborating with its partners and government bodies to navigate these challenges. The company is also focused on securing new business opportunities and investing in automation and restructuring initiatives to enhance margins and uphold its leadership in operational excellence. This strategic approach is aimed at ensuring Lear's long-term competitiveness and financial success.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Lear Corp (LEA, Financial) is $98.25 with a high estimate of $125.00 and a low estimate of $83.00. The average target implies an upside of 11.18% from the current price of $88.37. More detailed estimate data can be found on the Lear Corp (LEA) Forecast page.
Based on the consensus recommendation from 17 brokerage firms, Lear Corp's (LEA, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Lear Corp (LEA, Financial) in one year is $150.48, suggesting a upside of 70.28% from the current price of $88.37. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Lear Corp (LEA) Summary page.
LEA Key Business Developments
Release Date: February 06, 2025
- Revenue: $23.3 billion for 2024.
- Core Operating Earnings: $1.1 billion, or 4.7% of net sales for 2024.
- Adjusted Earnings Per Share: $12.62, a 5% increase from last year.
- Operating Cash Flow: $1.1 billion for 2024.
- Free Cash Flow: $561 million for 2024.
- Share Repurchase: $400 million worth of shares repurchased in 2024.
- Global Headcount Reduction: Reduced by 15,000, with a 9% reduction in Seating and 8% in E-Systems.
- Seating Segment Sales: $17.2 billion, a 2% decrease from 2023.
- Seating Segment Adjusted Earnings: $1.1 billion, with a 6.5% operating margin.
- E-Systems Segment Sales: $6.1 billion, a 3% increase from 2023.
- E-Systems Segment Adjusted Earnings: $310 million, with a 5.1% operating margin.
- 2025 Revenue Outlook: $21.9 billion to $22.9 billion.
- 2025 Core Operating Earnings Outlook: $915 million to $1.175 billion.
- 2025 Free Cash Flow Outlook: $530 million at the midpoint of guidance.
- Share Repurchase Authorization Remaining: $1.1 billion through December 31, 2026.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lear Corp (LEA, Financial) generated $23.3 billion in revenue for 2024, with core operating earnings of $1.1 billion.
- The company achieved a 5% increase in adjusted earnings per share, driven by share repurchase programs and higher earnings.
- Lear Corp (LEA) surpassed its share repurchase target by buying back $400 million worth of shares, exceeding the $325 million target.
- The company improved E-Systems' margins for the second consecutive year, reaching over 5%.
- Lear Corp (LEA) secured significant new business awards with Chinese OEMs, including BYD, Geely, and Xiaomi, contributing to growth in the Chinese market.
Negative Points
- Global production was down 1% on a Lear sales-weighted basis, with declines in North America and Europe.
- Lear Corp (LEA) experienced a 2% decline in sales for the fourth quarter of 2024, reflecting lower volumes on Lear platforms.
- The company's 2025 revenue outlook indicates a decrease of 4% compared to 2024, with core operating earnings expected to decline by 5%.
- Lear Corp (LEA) faced challenges with lower-than-expected volumes on several EV programs, impacting its sales backlog.
- The company anticipates continued restructuring costs of approximately $175 million to support footprint rationalization and cost reduction efforts.
