LEAR CORP (LEA) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LEA - US5218652049 - Common Stock
120.58 USD
+1.25 (+1.05%)
120.58 USD
0 (0%)
Taking everything into account, LEA scores 5 out of 10 in our fundamental rating. LEA was compared to 42 industry peers in the Automobile Components industry. Both the profitability and the financial health of LEA get a neutral evaluation. Nothing too spectacular is happening here. LEA is valued quite cheap, but it does not seem to be growing. Finally LEA also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year LEA was profitable.
- LEA had a positive operating cash flow in the past year.
- Each year in the past 5 years LEA has been profitable.
- LEA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- LEA has a Return On Assets of 2.92%. This is in the better half of the industry: LEA outperforms 71.43% of its industry peers.
- The Return On Equity of LEA (8.66%) is better than 80.95% of its industry peers.
- With a decent Return On Invested Capital value of 8.16%, LEA is doing good in the industry, outperforming 76.19% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for LEA is in line with the industry average of 9.10%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.92% | ||
| ROE | 8.66% | ||
| ROIC | 8.16% |
ROA(3y)3.3%
ROA(5y)2.78%
ROE(3y)10.01%
ROE(5y)8.33%
ROIC(3y)8.42%
ROIC(5y)7.66%
1.3 Margins
- The Profit Margin of LEA (1.92%) is better than 66.67% of its industry peers.
- In the last couple of years the Profit Margin of LEA has declined.
- Looking at the Operating Margin, with a value of 4.35%, LEA is in line with its industry, outperforming 52.38% of the companies in the same industry.
- LEA's Operating Margin has declined in the last couple of years.
- LEA's Gross Margin of 7.51% is on the low side compared to the rest of the industry. LEA is outperformed by 80.95% of its industry peers.
- LEA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.35% | ||
| PM (TTM) | 1.92% | ||
| GM | 7.51% |
OM growth 3Y-0.38%
OM growth 5Y-7.19%
PM growth 3Y3.85%
PM growth 5Y-10.6%
GM growth 3Y0.04%
GM growth 5Y-4.59%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LEA is destroying value.
- Compared to 1 year ago, LEA has less shares outstanding
- Compared to 5 years ago, LEA has less shares outstanding
- Compared to 1 year ago, LEA has a worse debt to assets ratio.
2.2 Solvency
- LEA has an Altman-Z score of 2.84. This is not the best score and indicates that LEA is in the grey zone with still only limited risk for bankruptcy at the moment.
- LEA has a Altman-Z score (2.84) which is in line with its industry peers.
- The Debt to FCF ratio of LEA is 3.80, which is a good value as it means it would take LEA, 3.80 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of LEA (3.80) is better than 73.81% of its industry peers.
- A Debt/Equity ratio of 0.55 indicates that LEA is somewhat dependend on debt financing.
- The Debt to Equity ratio of LEA (0.55) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.55 | ||
| Debt/FCF | 3.8 | ||
| Altman-Z | 2.84 |
ROIC/WACC0.96
WACC8.48%
2.3 Liquidity
- A Current Ratio of 1.35 indicates that LEA should not have too much problems paying its short term obligations.
- The Current ratio of LEA (1.35) is worse than 71.43% of its industry peers.
- LEA has a Quick Ratio of 1.05. This is a normal value and indicates that LEA is financially healthy and should not expect problems in meeting its short term obligations.
- LEA has a Quick ratio of 1.05. This is in the lower half of the industry: LEA underperforms 61.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 1.05 |
3. Growth
3.1 Past
- The earnings per share for LEA have decreased by -2.99% in the last year.
- The Earnings Per Share has been decreasing by -2.01% on average over the past years.
- LEA shows a decrease in Revenue. In the last year, the revenue decreased by -1.91%.
- Measured over the past years, LEA shows a small growth in Revenue. The Revenue has been growing by 3.30% on average per year.
EPS 1Y (TTM)-2.99%
EPS 3Y16.72%
EPS 5Y-2.01%
EPS Q2Q%-3.46%
Revenue 1Y (TTM)-1.91%
Revenue growth 3Y6.56%
Revenue growth 5Y3.3%
Sales Q2Q%1.71%
3.2 Future
- The Earnings Per Share is expected to grow by 13.48% on average over the next years. This is quite good.
- Based on estimates for the next years, LEA will show a small growth in Revenue. The Revenue will grow by 2.81% on average per year.
EPS Next Y-2.53%
EPS Next 2Y6.51%
EPS Next 3Y9.77%
EPS Next 5Y13.48%
Revenue Next Year-0.25%
Revenue Next 2Y0.73%
Revenue Next 3Y1.39%
Revenue Next 5Y2.81%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 9.79, which indicates a very decent valuation of LEA.
- Based on the Price/Earnings ratio, LEA is valued cheaply inside the industry as 92.86% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 28.39. LEA is valued rather cheaply when compared to this.
- With a Price/Forward Earnings ratio of 8.43, the valuation of LEA can be described as very reasonable.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of LEA indicates a rather cheap valuation: LEA is cheaper than 90.48% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of LEA to the average of the S&P500 Index (25.72), we can say LEA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.79 | ||
| Fwd PE | 8.43 |
4.2 Price Multiples
- 88.10% of the companies in the same industry are more expensive than LEA, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of LEA indicates a rather cheap valuation: LEA is cheaper than 80.95% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.51 | ||
| EV/EBITDA | 4.97 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y6.51%
EPS Next 3Y9.77%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.53%, LEA has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.61, LEA pays a better dividend. On top of this LEA pays more dividend than 90.48% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, LEA pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.53% |
5.2 History
- The dividend of LEA has a limited annual growth rate of 0.74%.
- LEA has been paying a dividend for at least 10 years, so it has a reliable track record.
- LEA has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)0.74%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
- 37.81% of the earnings are spent on dividend by LEA. This is a low number and sustainable payout ratio.
- LEA's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.81%
EPS Next 2Y6.51%
EPS Next 3Y9.77%
LEAR CORP / LEA FAQ
Can you provide the ChartMill fundamental rating for LEAR CORP?
ChartMill assigns a fundamental rating of 5 / 10 to LEA.
What is the valuation status for LEA stock?
ChartMill assigns a valuation rating of 7 / 10 to LEAR CORP (LEA). This can be considered as Undervalued.
How profitable is LEAR CORP (LEA) stock?
LEAR CORP (LEA) has a profitability rating of 5 / 10.
How financially healthy is LEAR CORP?
The financial health rating of LEAR CORP (LEA) is 4 / 10.
What is the earnings growth outlook for LEAR CORP?
The Earnings per Share (EPS) of LEAR CORP (LEA) is expected to decline by -2.53% in the next year.