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Aggressive Growth

Lear Corp (LEA - Snapshot Report) nears its 52-week high, but thanks to drastic estimate revisions shares remain a solid value as well.

Company Description

Lear Corp makes automotive seats and related components and electrical power systems world wide.

Sales Jump 33%

On Aug 3 Lear reported quarterly sales of $3.0 billion, which is a 33% improvement over the same period last year. In that period of time, vehicle production is up 73% in North America, 24% in China and 11% in Europe.

Income came in at just under $171 million, or $3.16 per share. Lear more than doubled the Zacks Consensus Estimate, which was calling for just $1.30.

Raising Outlook

In the same press release Lear reiterated its $11 billion sales target. However, the company raised both is operating earnings and free cash flow expectations.

Analysts Follow Suit

Following the news, analysts quickly raised full-year estimate for both 2010 and 2011. The Zacks Consensus Estimate for this year is now $5.79, up $1.82. Next year's forecasts are coming in at $7.89, up $1.30 since the announcement.

Growth rates are staggering given the $2.66 loss Lear posted in 2009.


Shares of LEA are exchanging hands with attractive valuations. The forward P/E is coming in near 14 times and the PEG ratio of 0.8 has the growth rate priced at a bargain.

The Chart

Lear's stock has been climbing for several weeks now and is not pressuring its 52-week high. Given the momentum from the recent surprise and valuations, shares have a good chance at pushing through to new highs.

Lear Corp - ticker LEA >

Bill Wilton is the Growth Stock Strategist for He is also the Editor in charge of the market-beating Zacks Growth Trader service

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