Back to top

Image: Bigstock

Lear (LEA) Rides on Seating & E-Systems Amid China Woes

Read MoreHide Full Article

We issued an updated research report on Lear Corporation (LEA - Free Report) on Jun 11.

Headquartered in Southfield, MI, the company supplies automotive seating and electrical systems (E-Systems) to the global automotive industry. Lear intends to introduce a variety of programs in the promising Seating and E-Systems segments.

In one hand, the growing mix of high-content crossovers, sports utility vehicles (SUVs) and luxury vehicles are likely to drive the demand for the Seating segment. On the other hand, rising consumer demand for vehicle content — requiring signal, data and power management — and growing need for electrification and connectivity is adding to the demand for the E-Systems segment.

However, production declines in key markets are some of the headwinds that the company is facing. In fact, the recent slump in Lear’s revenues was majorly due to lower production volume in China as well as other key markets. In fact, it expects volume to decline in the first half of 2019.

In the past six months, shares of the company have underperformed the industry it belongs to. Over this time frame, the stock has gained 8% while the industry grew 12.5%.

 

 

Lear currently has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Ford Motor Company (F - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and Cummins Inc. (CMI - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ford has an expected long-term growth rate of 7.3%. Over the past six months, shares of the company have gained 14.8%.

Fox Factory has an expected long-term growth rate of 16.4%. Over the past six months, shares of the company have gained 10.4%.

Cummins has an expected long-term growth rate of 8%. Over the past six months, shares of the company have gained 20.8%.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Published in