Lear Reaches 52-Week High - Analyst Blog
02 Juillet 2013 - 3:40PM
Zacks
Shares of Lear Corp. (LEA) hit a new 52-week
high of $62.29 on Jul 1, which is above its previous level of
$61.51 on May 22, and closed at $61.55 on the same date. The
closing price represented a strong one-year return of 65.2% and
year-to-date return of 30.5%.
Lear Corporation designs, manufactures, assembles and supplies
automotive seat systems, electrical distribution systems, and
related components primarily to automotive original equipment
manufacturers mainly in North America, South America, Europe and
Asia. It has a market cap of $5.6 billion. Average volume of shares
traded over the last three months stood at approximately
1,011.6K.
Shares of LEA started escalating due to improving fundamentals in
the automobile parts market. However, the company failed to impress
investors with its first-quarter results on Apr 25.
Lear posted a 5.8% fall in adjusted earnings per share to $1.30 in
the first quarter of 2013 from $1.38 in the corresponding quarter
last year. However, earnings per share comfortably outpaced the
Zacks Consensus Estimate of $1.09. Net income declined 11.1% to
$124.4 million from $140.0 million in the year-ago quarter.
Revenues increased 8.3% to $3.9 million in the reported quarter,
surpassing the Zacks Consensus Estimate of $3.7 million. However,
global industry production decreased 1% year over year, with an 8%
fall in Europe. Production improved 12% in China and 1% in North
America.
Not only Lear, shares of other auto parts maker such as
Magna International Inc. (MGA), Johnson
Controls Inc. (JCI) and BorgWarner Inc.
(BWA) are also reaching 52-week highs due to continuous
improvements in the market. Investors believe that the recessionary
conditions in the industry no longer exist.
Two of the company’s biggest markets, North America (which
contributed 39.2% to its 2012 revenues) and Europe (35.0%) are
expected to rebound significantly in the coming years. Further,
Lear’s three largest customers – GM, Ford and BMW, together
accounting for more than 50% of revenues – are expected to perform
well in the near-term
Currently, LEA retains a Zacks Rank #2 (Buy).
BORG WARNER INC (BWA): Free Stock Analysis Report
JOHNSON CONTROL (JCI): Free Stock Analysis Report
LEAR CORPORATN (LEA): Free Stock Analysis Report
MAGNA INTL CL A (MGA): Free Stock Analysis Report
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