Citi sets Adient stock target at $14, cites near-term pressure

On Wednesday, Citi analysts initiated coverage on Adient shares (NYSE:ADNT) with a Neutral rating and set a price target of $14.00. According to InvestingPro data, the stock currently trades at $12.74, with analyst targets ranging from $13 to $64, suggesting potential upside. The company’s market capitalization stands at $1.07 billion. The analysts highlighted Adient’s recent improvements, including an increase in EBIT margin performance from 4.8% in fiscal 2022 to 6.0% in 2024, and a significant reduction in debt by nearly 50% since June 2021. Despite these advancements and the potential for upside in fiscal 2026, they noted that suppliers have consistently underperformed the S&P 500 for the past three years.

The analysis pointed out that the ongoing volatility due to tariffs is expected to maintain pressure on the stocks. However, Adient’s cost improvement initiatives and the anticipated increase in industry production could offer benefits moving forward. The analysts also mentioned that new business gains in China and a favorable customer mix in North America could contribute to a 3% growth above the market in 2026.

Citi analysts forecasted a recovery in industry production in Adient’s key markets in the upcoming years. They expressed optimism that supply disruptions have largely been resolved and that a resolution to tariff tensions could position Adient and the Supplier Group to benefit significantly. The Supplier Group was valued at 4.0-6.0 times on an EV/EBITDA basis and 6.0-8.0 times on a P/E basis by the analysts.

Despite the positive outlook for the future, Citi analysts cautioned that near-term changes and concerns, particularly related to import tariffs and industry weakness in Europe, are likely to restrict more normalized valuation levels for the Supplier Group. They concluded their initiation of coverage on Adient with the expectation that a more normalized valuation could provide an upside target of $14 per share. The company currently trades at an EV/EBITDA multiple of 3.9x, and InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value model. Investors can access detailed valuation analysis and 12 additional ProTips about Adient through InvestingPro’s comprehensive research platform.

In other recent news, ADC Therapeutics reported its fourth-quarter financial results, surpassing earnings expectations but falling short on revenue. The company posted an adjusted earnings per share of -$0.25, better than the analyst estimate of -$0.43. However, revenue came in at $16.91 million, missing the consensus forecast of $18.85 million. For the full year 2024, ADC Therapeutics generated net product revenues of $69.3 million from its lymphoma drug ZYNLONTA, a slight increase from $69.1 million in 2023. The company also highlighted progress in its clinical programs, including the Phase 3 LOTIS-5 trial and promising initial data from the Phase 1b LOTIS-7 trial. Meanwhile, ITT (NYSE:ITT) Inc. has nominated Douglas DelGrosso for election to its Board of Directors. DelGrosso, with a strong background in global operations, was previously the CEO of Adient plc. If elected, he is expected to join ITT’s Nominating and Governance Committee, contributing to the company’s strategy to enhance its board with experienced executives.

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