LEAR CORP (LEA) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LEA - US5218652049 - Common Stock
119.87 USD
-1.86 (-1.53%)
119.86 USD
-0.01 (-0.01%)
Overall LEA gets a fundamental rating of 5 out of 10. We evaluated LEA against 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 has a bad growth rate and is valued cheaply. LEA also has an excellent dividend rating. These ratings could make LEA a good candidate for value and dividend investing.
1. Profitability
1.1 Basic Checks
- LEA had positive earnings in the past year.
- In the past year LEA had a positive cash flow from operations.
- LEA had positive earnings in each of the past 5 years.
- In the past 5 years LEA always reported a positive cash flow from operatings.
1.2 Ratios
- LEA has a better Return On Assets (2.92%) than 71.43% of its industry peers.
- With an excellent Return On Equity value of 8.66%, LEA belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.
- LEA's Return On Invested Capital of 8.16% is fine compared to the rest of the industry. LEA outperforms 76.19% of its industry peers.
- The Average Return On Invested Capital over the past 3 years 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
- LEA has a better Profit Margin (1.92%) than 66.67% of its industry peers.
- In the last couple of years the Profit Margin of LEA has declined.
- LEA has a Operating Margin (4.35%) which is in line with its industry peers.
- In the last couple of years the Operating Margin of LEA has declined.
- With a Gross Margin value of 7.51%, LEA is not doing good in the industry: 80.95% of the companies in the same industry are doing better.
- 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), LEA is destroying value.
- Compared to 1 year ago, LEA has less shares outstanding
- The number of shares outstanding for LEA has been reduced compared to 5 years ago.
- The debt/assets ratio for LEA is higher compared to a year ago.
2.2 Solvency
- An Altman-Z score of 2.84 indicates that LEA is not a great score, but indicates only limited risk for bankruptcy at the moment.
- With a decent Altman-Z score value of 2.84, LEA is doing good in the industry, outperforming 61.90% of the companies in the same industry.
- LEA has a debt to FCF ratio of 3.80. This is a good value and a sign of high solvency as LEA would need 3.80 years to pay back of all of its debts.
- With a decent Debt to FCF ratio value of 3.80, LEA is doing good in the industry, outperforming 73.81% of the companies in the same industry.
- LEA has a Debt/Equity ratio of 0.55. This is a neutral value indicating 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
WACC8.47%
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.
- A Quick Ratio of 1.05 indicates that LEA should not have too much problems paying its short term obligations.
- LEA has a worse Quick ratio (1.05) than 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.
- Looking at the last year, LEA shows a decrease in Revenue. The Revenue has decreased by -1.91% in the last year.
- LEA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.30% yearly.
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
- Based on estimates for the next years, LEA will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.48% on average per year.
- LEA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.81% yearly.
EPS Next Y-2.96%
EPS Next 2Y6.36%
EPS Next 3Y9.33%
EPS Next 5Y13.48%
Revenue Next Year-0.41%
Revenue Next 2Y0.76%
Revenue Next 3Y1.49%
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
- With a Price/Earnings ratio of 9.73, the valuation of LEA can be described as very reasonable.
- LEA's Price/Earnings ratio is rather cheap when compared to the industry. LEA is cheaper than 92.86% of the companies in the same industry.
- LEA is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- LEA is valuated reasonably with a Price/Forward Earnings ratio of 8.40.
- Based on the Price/Forward Earnings ratio, LEA is valued cheaply inside the industry as 90.48% of the companies are valued more expensively.
- LEA's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.73 | ||
| Fwd PE | 8.4 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, LEA is valued cheaply inside the industry as 88.10% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, LEA is valued cheaper than 80.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.46 | ||
| EV/EBITDA | 5 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y6.36%
EPS Next 3Y9.33%
5. Dividend
5.1 Amount
- LEA has a Yearly Dividend Yield of 2.53%. Purely for dividend investing, there may be better candidates out there.
- LEA's Dividend Yield is rather good when compared to the industry average which is at 0.61. LEA pays more dividend than 90.48% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, 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 paid a dividend for at least 10 years, which is 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
- LEA pays out 37.81% of its income as dividend. This is a sustainable payout ratio.
- LEA's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.81%
EPS Next 2Y6.36%
EPS Next 3Y9.33%
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 5 / 10.
What is the earnings growth outlook for LEAR CORP?
The Earnings per Share (EPS) of LEAR CORP (LEA) is expected to decline by -2.96% in the next year.