IMPORTANT DISCLAIMER: Blank Capital Research ("BCR") is a technology platform, not a registered investment advisor or broker-dealer. The algorithmically generated signals, scores, and rankings provided on this site ("God Mode" Signals) are for informational and research purposes only and do not constitute financial advice, investment recommendations, or an offer to sell or solicit an offer to buy any securities.
HYPOTHETICAL PERFORMANCE RESULTS: The "timing scores" and "regime signals" displayed are based on quantitative models. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
RISK OF LOSS: Trading in financial markets involves a high degree of risk and may result in the loss of your entire investment. Data provided by third-party sources (Intrinio, Snowflake) is believed to be reliable but is not guaranteed for accuracy or completeness. Past performance is not indicative of future results.
Relative to Consumer Discretionary Sector Median (N=442)
Metric
LEA
Benchmark
P/E Ratio
10.9x
-55%
EV/EBITDA
7.5x
+53%
Price / Book
1.2x
Implied Value Audit
FAIR VALUE
Implied Fair Value (vs Sector)
+7.7%
$134.22Spot: $124.60
Spot
Implied
-50% Delta+50% Delta
Relative valuation derived from Consumer Discretionary sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
11.1%
Sector: 6.2%
Dividend Analysis audit
INCOME
3.04%
Trailing Yield
$3.04
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
33%SAFE
Analyst Projections
Analyst Consensus
Unlock Valuation Tools
Sign up for free access to institutional-quality research tools.
Based on our 6-factor quantitative model, LEAR CORP (LEA) receives a "Hold" rating with a composite score of 52.3/100, ranked #978 out of 4446 stocks. Key factor scores: Quality 50/100, Value 75/100, Momentum 57/100. This is quantitative analysis only — not investment advice.
LEAR CORP (LEA) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does LEAR CORP Do?
Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufacturers in North America, Europe, Africa, Asia, and South America. Its Seating segment offers seat systems, seat subsystems, keyseat components, seat trim covers, seat mechanisms, seat foams, and headrests, as well as surface materials, such as leather and fabric for automobiles and light trucks, compact cars, pick-up trucks, and sport utility vehicles. The company's E-Systems segment provides electrical distribution and connection systems that route electrical signals and networks; and manage electrical power within the vehicle for various powertrains. This segment's products comprise wire harnesses, terminals and connectors, engineered components, and junction boxes; electronic system products, including body domain control modules, smart and passive junction boxes, gateway and communication modules, integrated power modules, and high voltage switching and power control systems. It also offers software and connected services comprising Xevo Market, an in-vehicle commerce and service platform; and software and services for the cloud, vehicles, and mobile devices. In addition, this segment provides cybersecurity software; advanced vehicle positioning for automated and autonomous driving applications; and short-range communication and cellular protocols for vehicle connectivity. It offers its products and services under the XEVO, GUILFORD, EAGLE OTTAWA, ConfigurE+, INTUTM, LEAR CONNEXUSTM, EXO, JOURNEYWARE, ProTec, SMART JUNCTION BOX, STRUCSURE, AVENTINO, and TeXstyle brands. Lear Corporation was founded in 1917 and is headquartered in Southfield, Michigan. LEAR CORP (LEA) is classified as a mid-cap stock in the Consumer Discretionary sector, specifically within the Automobiles And Trucks industry. The company is led by CEO Raymond E. Scott and employs approximately 168,700 people, headquartered in SOUTHFIELD, Michigan. With a market capitalization of $6.2B, LEA is one of the notable companies in the Consumer Discretionary sector.
LEAR CORP (LEA) Stock Rating — Hold (April 2026)
As of April 2026, LEAR CORP receives a Hold rating with a composite score of 52.3/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.LEA ranks #978 out of 4,446 stocks in our coverage universe. Within the Consumer Discretionary sector, LEAR CORP ranks #68 of 442 stocks, placing it in the top quartile of its Consumer Discretionary peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
LEA Stock Price and 52-Week Range
LEAR CORP (LEA) currently trades at $124.60. The stock lost $0.58 (0.5%) in the most recent trading session. The 52-week high for LEA is $142.84, which means the stock is currently trading -12.8% from its annual peak. The 52-week low is $73.85, putting the stock 68.7% above its annual trough. Recent trading volume was 328K shares, suggesting relatively thin trading activity.
Is LEA Overvalued or Undervalued? — Valuation Analysis
LEAR CORP (LEA) carries a value factor score of 75/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 10.95x, compared to the Consumer Discretionary sector average of 24.47x — a discount of 55%. The price-to-book ratio stands at 1.21x, versus the sector average of 1.99x. The price-to-sales ratio is 0.28x, compared to 0.27x for the average Consumer Discretionary stock. On an enterprise value basis, LEA trades at 7.49x EV/EBITDA, versus 4.91x for the sector.
Based on these multiples, LEAR CORP appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
LEAR CORP Profitability — ROE, Margins, and Quality Score
LEAR CORP (LEA) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 11.1%, compared to the Consumer Discretionary sector average of 6.2%, which is within a healthy range. Return on assets (ROA) comes in at 3.9% versus the sector average of 2.5%.
On a margin basis, LEAR CORP reports gross margins of 6.9%, compared to 36.9% for the sector. The operating margin is 3.7% (sector: 3.8%). Net profit margin stands at 2.5%, versus 2.1% for the average Consumer Discretionary stock. Revenue growth is running at -5.5% on a trailing basis, compared to 3.3% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
LEA Debt, Balance Sheet, and Financial Health
LEAR CORP has a debt-to-equity ratio of 185.0%, compared to the Consumer Discretionary sector average of 89.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.35x, suggesting adequate working capital coverage. Total debt on the balance sheet is $2.79B. Cash and equivalents stand at $1.01B.
LEA has a beta of 1.05, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for LEAR CORP is 66/100, reflecting average volatility within the normal range for its sector.
LEAR CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, LEAR CORP reported revenue of $22.85B and earnings per share (EPS) of $8.22. Net income for the quarter was $577M. Gross margin was 6.9%. Operating income came in at $843M.
In FY 2025, LEAR CORP reported revenue of $23.26B and earnings per share (EPS) of $8.22. Net income for the quarter was $527M. Gross margin was 6.5%. Revenue grew -0.2% year-over-year compared to FY 2024. Operating income came in at $777M.
In Q3 2025, LEAR CORP reported revenue of $5.68B and earnings per share (EPS) of $2.03. Net income for the quarter was $126M. Gross margin was 6.4%. Revenue grew 1.7% year-over-year compared to Q3 2024. Operating income came in at $193M.
In Q2 2025, LEAR CORP reported revenue of $6.03B and earnings per share (EPS) of $3.07. Net income for the quarter was $192M. Gross margin was 7.3%. Revenue grew 0.3% year-over-year compared to Q2 2024. Operating income came in at $248M.
Over the past 8 quarters, LEAR CORP has demonstrated a growth trajectory, with revenue expanding from $6.01B to $22.85B. Investors analyzing LEA stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
LEA Dividend Yield and Income Analysis
LEAR CORP (LEA) currently pays a dividend yield of 3.0%. At this yield, a $10,000 investment in LEA stock would generate approximately $$304.00 in annual dividend income.
LEA Momentum and Technical Analysis Profile
LEAR CORP (LEA) has a momentum factor score of 57/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 35/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 17/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
LEA vs Competitors — Consumer Discretionary Sector Ranking and Peer Comparison
Comparing LEA against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full LEA vs S&P 500 (SPY) comparison to assess how LEAR CORP stacks up against the broader market across all factor dimensions.
LEA Next Earnings Date
No upcoming earnings date has been announced for LEAR CORP (LEA) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy LEA? — Investment Thesis Summary
LEAR CORP presents a balanced picture with arguments on both sides. The value score of 75/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 66/100) reduces downside risk.
In summary, LEAR CORP (LEA) earns a Hold rating with a composite score of 52.3/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on LEA stock.
We'll email you when stocks you follow change their composite rating.
Institutional Research Dossier
LEAR CORP (LEA) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Lear Corporation (LEA). While the company exhibits attractive valuation metrics relative to its sector, particularly in P/E and EV/EBITDA, concerns regarding revenue growth and gross margin compression temper our enthusiasm. Lear's strategic positioning in automotive seating and E-Systems provides a degree of stability, but the cyclical nature of the automotive industry and the company's relatively high debt levels warrant a cautious approach.
The primary takeaway is that Lear presents a mixed bag of value and risk. Its low valuation multiples suggest potential upside, but the company's recent revenue decline and lower gross margins compared to the sector raise questions about its long-term growth prospects and competitive positioning. Investors should closely monitor Lear's ability to improve its operational efficiency and navigate the evolving automotive landscape before considering a more bullish stance.
Business Strategy & Overview
Lear Corporation operates in two primary segments: Seating and E-Systems. The Seating segment, which constitutes a significant portion of Lear's revenue, focuses on designing, developing, and manufacturing complete seat systems and related components for automotive OEMs. This segment's success hinges on its ability to innovate in areas such as lightweighting, comfort, and advanced features like integrated heating and cooling. The E-Systems segment provides electrical distribution systems, connection systems, and electronic system products, including wire harnesses, terminals, connectors, and various control modules. This segment is increasingly important as vehicles become more electrified and connected, requiring sophisticated electrical architectures.
Lear's strategic positioning involves maintaining strong relationships with major automotive manufacturers globally. The company aims to be a preferred supplier by offering high-quality products, competitive pricing, and innovative solutions. Lear invests in research and development to stay ahead of industry trends, such as autonomous driving and electric vehicles, and to develop new products and technologies that meet the evolving needs of its customers. A key part of their strategy involves expanding their E-Systems offerings to capitalize on the growing demand for vehicle electrification and connectivity solutions.
The automotive industry is highly competitive, with numerous suppliers vying for business from a limited number of OEMs. Lear competes with companies like Adient, Magna International, and Aptiv. To differentiate itself, Lear focuses on providing value-added services, such as design and engineering support, and on developing proprietary technologies that enhance the performance and functionality of its products. The company also emphasizes operational efficiency and cost control to maintain its competitiveness in the market.
Lear's product pipeline includes advancements in seating comfort and ergonomics, as well as new electrical distribution and connection systems for electric vehicles. The company is also investing in software and connected services, such as in-vehicle commerce platforms and cybersecurity solutions, to generate new revenue streams and enhance its overall value proposition. The success of Lear's strategy depends on its ability to execute effectively, adapt to changing market conditions, and maintain its competitive edge in a dynamic industry.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-5.5%
Sector: 3.3%
-268% VS SCTR
Economic Moat Analysis
Lear's economic moat is best characterized as Narrow. While the company benefits from established relationships with major automotive OEMs and possesses some degree of technological expertise, these advantages are not insurmountable. The automotive supply industry is highly competitive, and OEMs often have multiple suppliers for the same components, limiting the pricing power of individual suppliers like Lear.
One potential source of a moat is switching costs. Automotive manufacturers invest significant time and resources in qualifying suppliers and integrating their components into vehicle designs. Once a supplier is selected, switching to a new supplier can be costly and time-consuming. However, OEMs regularly evaluate their supplier relationships and are willing to switch if they can obtain better pricing, quality, or technology. This limits the extent to which Lear can rely on switching costs to protect its market share.
Lear's intangible assets, such as its brand reputation and technological know-how, also contribute to its narrow moat. The company has a long history in the automotive industry and is known for its expertise in seating and electrical systems. However, these intangible assets are not unique to Lear, and other suppliers possess similar capabilities. Furthermore, the rapid pace of technological change in the automotive industry requires continuous investment in research and development to maintain a competitive edge.
While Lear does not possess a wide moat based on cost advantages or efficient scale, its established relationships, technological expertise, and moderate switching costs provide a narrow competitive advantage. This narrow moat allows Lear to generate consistent profits and maintain its position as a leading supplier to the automotive industry, but it also leaves the company vulnerable to competition from other suppliers and to changes in the automotive market.
Financial Health & Profitability
Lear's financial health presents a mixed picture. The company's revenue has shown a slight decline recently, with FY2025 revenue at $23.26B compared to $23.47B in FY2023, indicating a -5.5% revenue growth compared to the sector's 3.2%. This decline raises concerns about Lear's ability to maintain its market share and capitalize on growth opportunities in the automotive industry. Gross margins have also compressed, from 7.3% in FY2023 to 6.5% in FY2025, suggesting increased cost pressures or pricing challenges.
Profitability metrics, such as ROE (11.1%), are relatively strong compared to the sector average (5.8%), indicating efficient use of equity. However, operating margin (3.7%) is slightly below the sector average (3.8%), suggesting room for improvement in operational efficiency. Net margin (2.5%) is slightly above the sector average (2.1%). The quarterly financial history reveals fluctuations in revenue and profitability, reflecting the cyclical nature of the automotive industry and the impact of external factors such as supply chain disruptions and changes in consumer demand.
Lear's balance sheet shows a significant amount of debt, with a debt-to-equity ratio of 185.00, which is considerably higher than the sector average of 91.00. This high level of leverage increases the company's financial risk and could limit its ability to invest in growth initiatives or weather economic downturns. However, Lear also has a substantial cash balance of $1.01B, providing some financial flexibility. The current ratio of 1.35 indicates adequate liquidity to meet short-term obligations.
Free cash flow generation has been inconsistent. While FY2024 saw a strong FCF of $980.64M, the TTM FCF is significantly lower at $42.73M. This volatility in free cash flow raises concerns about the company's ability to consistently generate cash and fund its operations. Overall, Lear's financial health is characterized by a combination of strengths, such as strong ROE and adequate liquidity, and weaknesses, such as declining revenue, compressing margins, and high debt levels. Investors should closely monitor these factors to assess the company's long-term financial stability and growth prospects.
Valuation Assessment
Lear's valuation metrics suggest that the stock is relatively undervalued compared to its sector. The company's P/E ratio of 13.8x is significantly lower than the sector average of 28.0x, indicating that investors are paying less for each dollar of Lear's earnings. Similarly, the EV/EBITDA ratio of 1.9x is substantially lower than the sector average of 5.3x, suggesting that Lear's enterprise value is low relative to its earnings before interest, taxes, depreciation, and amortization.
However, these low valuation multiples may reflect concerns about Lear's growth prospects and financial health. The company's recent revenue decline and high debt levels could be weighing on investor sentiment. Furthermore, the cyclical nature of the automotive industry and the potential for increased competition could be contributing to the lower valuation.
A discounted cash flow (DCF) analysis would be necessary to determine the intrinsic value of Lear's stock. However, based on the available data, it appears that the stock is trading at a discount to its potential value. If Lear can improve its revenue growth, expand its margins, and reduce its debt levels, the stock could experience significant upside. Conversely, if the company's financial performance continues to deteriorate, the stock could decline further.
Overall, Lear's valuation is attractive relative to its sector, but investors should carefully consider the company's risks and uncertainties before investing. The stock may be suitable for value investors who are willing to take on some risk in exchange for the potential for high returns. However, more conservative investors may prefer to wait for more evidence of improved financial performance before investing in Lear.
Risk & Uncertainty
Lear faces several specific risks that could negatively impact its business and financial performance. One of the most significant risks is the cyclical nature of the automotive industry. Demand for automotive products is highly sensitive to economic conditions, and a recession or slowdown in economic growth could lead to a decline in vehicle sales and a corresponding decrease in demand for Lear's products. This cyclicality is inherent to the industry and difficult to mitigate entirely.
Another risk is the increasing competition in the automotive supply industry. Lear competes with numerous other suppliers, some of which may have lower costs or superior technology. The company's ability to maintain its market share and profitability depends on its ability to innovate, improve its operational efficiency, and offer competitive pricing. Failure to do so could result in lost business and reduced earnings.
A further risk is the concentration of Lear's customer base. The company relies on a relatively small number of large automotive OEMs for a significant portion of its revenue. The loss of one or more of these key customers could have a material adverse effect on Lear's financial performance. The company attempts to mitigate this risk by maintaining strong relationships with its customers and diversifying its product offerings, but customer concentration remains a concern.
Lear's high debt levels also pose a risk. The company's debt-to-equity ratio of 185.00 is significantly higher than the sector average, increasing its financial risk and limiting its financial flexibility. A rise in interest rates or a decline in earnings could make it more difficult for Lear to service its debt obligations and could potentially lead to financial distress.
Bulls Say / Bears Say
The Bull Case
BULL VIEWLear's low valuation multiples, particularly its P/E and EV/EBITDA ratios, suggest significant upside potential as the market re-rates the stock to reflect its intrinsic value.
BULL VIEWThe company's strategic focus on E-Systems positions it to benefit from the growing demand for electric vehicles and connected car technologies, driving future revenue growth.
The Bear Case
BEAR VIEWLear's declining revenue and compressing gross margins indicate a weakening competitive position and raise concerns about its ability to maintain profitability in the long term.
BEAR VIEWThe company's high debt levels increase its financial risk and could limit its ability to invest in growth initiatives or weather economic downturns.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score LEA and 4,400+ other equities.
LEAR CORP exhibits a 9% valuation discount relative to institutional benchmarks. This represents a balanced risk/reward profile based on current multiples.
Return on Assets
Efficiency of asset utilization
3.9%
Sector: 2.5%
Gross Margin
Pricing power and cost efficiency
6.9%
Sector: 36.9%
Operating Margin
Core business profitability
3.7%
Sector: 3.8%
Net Margin
Bottom-line profitability
2.5%
Sector: 2.1%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $304 annually in dividends at the current trailing rate.
