Lear (LEA)
NYSEConsumer DiscretionaryAuto - PartsSnapshot 2026-09-09
$126.93-1.54%
Close 2026-09-09 · 1-day change
NYSEConsumer DiscretionaryAuto - PartsSnapshot 2026-09-09
Intact: The reason to own it still holds.
Lear makes car seats and electrical parts. Sales should reach about $23.6 billion in 2026. Free cash flow is expected near $600 million. The stock trades cheap with a price-to-earnings ratio of 9.7, below peers at 16.2.
Auto parts demand could slow, hurting sales growth below 3%. Profit margins may shrink if costs rise. Free cash flow might fall below $500 million, pressuring the stock.
The market prices in about 3% revenue growth and values the stock roughly 22% below our fair value near $169. Our fair value is well above the Street median of $133, reflecting a more optimistic view on growth and cash flow.
Breaks if: Dividend per share falls below $0.77
Breaks if: Free cash flow falls below $500M in FY26
Breaks if: Profit margin declines significantly below recent levels
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with stable management and a strong recent financial performance. The current thesis state is intact, supported by recent earnings beats and ongoing execution of management priorities.
The market appears to price LEA as cheap compared to its peers, with a notable expectations gap. This suggests that investors may not fully anticipate the potential for continued strong performance amid sector challenges.
Fundamentals are likely to remain strong, supported by management's commitment to reaffirming and raising financial outlooks. However, there is a moderate risk of missing expectations, especially given the high miss-rate in the industry.
The thesis hinges on several factors, including the ability of LEA to maintain or improve its financial guidance and the performance of sector bellwethers. Additionally, inflation trends and their impact on consumer discretionary spending will be crucial.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat indicates strong performance in E-Systems. New business awards also support the expansion of Seating and E-Systems leadership. There are no current threats impacting the thesis.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: Revenue falls below $22.85B in FY26
Overall, LEA's position is bolstered by strong recent results and a commitment to growth, but it faces sector challenges and execution risks. Not investment advice.