Lear expands automation capabilities with StoneShield acquisition

SOUTHFIELD, Mich. - Lear Corporation (NYSE: NYSE:LEA), a global automotive technology leader with a market capitalization of $5 billion and annual revenues exceeding $23 billion, has acquired StoneShield Engineering, a system integrator specializing in automation for the wire harness industry. The purchase, announced today, is intended to bolster Lear’s E-Systems business by enhancing the automation of its production processes. According to InvestingPro analysis, Lear currently trades below its Fair Value, suggesting potential upside for investors interested in the automotive components sector.

StoneShield Engineering, based in Castelo Branco, Portugal, was founded in 2017 and has developed expertise in robotics, automated taping applications, and high voltage harness assembly. Ray Scott, President and CEO of Lear, stated, "By utilizing StoneShield’s expertise, we will accelerate the automation of our production processes throughout our E-Systems business." He also emphasized the goal of developing new advanced technologies for wire harness production to improve efficiency and operational excellence. Eight analysts have recently revised their earnings estimates upward for the upcoming period, suggesting confidence in the company’s strategic direction.

The acquisition aligns with Lear’s IDEA strategy, which emphasizes innovation and technology to achieve operational excellence. StoneShield joins a series of strategic acquisitions by Lear, including WIP Industrial Automation, ASI Automation, Thagora Technology SRL, and InTouch Automation, which have collectively enhanced Lear’s portfolio of automation solutions.

Lear Corporation, a Fortune 500 company headquartered in Southfield, Michigan, is renowned for its Seating and E-Systems that contribute to superior in-vehicle experiences globally. The company’s commitment to innovation, operational excellence, and sustainability has established its presence in 38 countries, serving every major automaker in the world. With a P/E ratio of 9.7 and a consistent 14-year track record of dividend payments, Lear demonstrates strong fundamentals. For detailed analysis and additional insights, investors can access comprehensive research through InvestingPro, which offers exclusive financial metrics and expert analysis for over 1,400 US stocks.

This strategic move is expected to position Lear as a leader in next-generation automotive manufacturing technologies. The integration of StoneShield’s capabilities into Lear’s E-Systems business is part of the company’s ongoing efforts to leverage technology and drive innovation in the automotive industry. This information is based on a press release statement.

In other recent news, Lear Corporation has had its stock price target adjusted by TD Cowen, with a reduction from the previous $125.00 to $115.00, while maintaining a Buy rating. This adjustment comes after Lear reaffirmed its fourth-quarter 2024 revenue guidance, projected to be just under $5.5 billion. The company also anticipates meeting its segment margins expectations for the same quarter, with 6% for Seating and 5% for E-Systems.

In an effort to reduce labor costs, Lear is increasing automation, particularly in the E-Systems segment, and plans to boost its capital expenditures on automation and advanced manufacturing to $150 million in 2024. These strategic initiatives are expected to yield cumulative run rate savings of $150 million. The company is also strategizing to mitigate potential tariff risks affecting exports from Mexico, considering a partial production shift from Mexico to Honduras.

TD Cowen’s revised estimates for Lear’s production for the years 2025 through 2027 led to the lowered price target. However, the firm maintains a positive outlook on Lear’s stock with a continued Buy rating. These are among the recent developments for Lear Corporation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.