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Investing.com - TD Cowen has raised its price target on auto parts supplier Lear (NYSE:LEA) to $117 from $115 while maintaining a Hold rating on the stock. According to InvestingPro data, Lear is currently trading at $106.56, suggesting a potential 10% upside to the analyst target, though this remains significantly below InvestingPro’s calculated Fair Value, indicating the stock may be undervalued.
The adjustment follows what the firm described as a "mixed" third-quarter performance from the automotive seating and electrical systems manufacturer. Despite being a prominent player in the Automobile Components industry, Lear suffers from weak gross profit margins of just 7.52%, as highlighted in InvestingPro Tips.
TD Cowen noted an "improving risk/reward setup into 2026" for Lear, citing several positive factors including easier year-over-year EBIT comparisons, improving free cash flow, and potential U.S. onshoring opportunities. The company generated $734.8 million in free cash flow over the last twelve months, while maintaining its 15-year streak of consecutive dividend payments, currently yielding 2.94%.
The firm maintained a conservative stance on Lear’s 2026 outlook, specifically questioning whether the company’s 2026 volume and mix can outperform industry production better than it has in 2025.
TD Cowen made no major changes to its earnings estimates for Lear in conjunction with the modest price target increase.
In other recent news, Lear Corporation reported its third-quarter earnings for 2025, which exceeded market expectations. The company achieved an adjusted earnings per share (EPS) of $2.79, slightly surpassing the forecast of $2.78. Additionally, Lear’s revenue reached $5.7 billion, outperforming the anticipated $5.64 billion. These results highlight Lear’s ability to exceed analyst projections in both earnings and revenue. Despite the positive financial performance, the company’s stock experienced a decline in premarket trading. Investors might find these developments noteworthy as they reflect Lear’s current financial health. No analyst upgrades or downgrades were reported in conjunction with this earnings release.
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