Latest news with #LearCorporation
Yahoo
15-05-2025
- Business
- Yahoo
Lear's (NYSE:LEA) earnings have declined over year, contributing to shareholders 26% loss
Lear Corporation (NYSE:LEA) shareholders should be happy to see the share price up 20% in the last month. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 28% in a year, falling short of the returns you could get by investing in an index fund. Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline. We've discovered 3 warning signs about Lear. View them for free. While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. Unhappily, Lear had to report a 6.5% decline in EPS over the last year. The share price decline of 28% is actually more than the EPS drop. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock. The P/E ratio of 10.57 also points to the negative market sentiment. The image below shows how EPS has tracked over time (if you click on the image you can see greater detail). It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.. It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Lear's TSR for the last 1 year was -26%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments! Lear shareholders are down 26% for the year (even including dividends), but the market itself is up 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.5% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Lear has 3 warning signs we think you should be aware of. There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
31-03-2025
- Automotive
- Globe and Mail
Auto Sector Tariffs: Analysis & Implications
Auto Tariffs The introduction of 25% tariffs on foreign-made automobiles and parts is causing significant uncertainty in the auto industry, adding to the already tumultuous landscape created by ongoing trade tensions. The announcement, set to take effect on April 2, 2025, has triggered responses from various government officials, companies, and stakeholders around the world, highlighting the broader consequences of these tariff measures. Tariff Details and Impact on Trade The decision, made by U.S. President Donald Trump, invokes Section 232 of the Trade Expansion Act of 1962. This provision allows the U.S. government to impose tariffs if it determines that foreign imports threaten national security. By imposing a 25% tariff on passenger vehicles—including sedans, SUVs, crossovers, minivans, cargo vans, and light trucks—as well as key automobile components like engines, transmissions, powertrains, and electrical systems, the administration aims to boost domestic production and curb the influence of foreign manufacturers. Under this new tariff regime, the U.S. will also apply tariffs to certain automobile parts, though companies that can demonstrate a higher percentage of U.S. content in their vehicles will be able to avoid paying the full 25%. This would be done under the United States-Mexico-Canada Agreement (USMCA) rules, which allow auto manufacturers to certify their products' U.S. content. If they meet these standards, they will only face tariffs on the non-U.S. components in their vehicles. For example, U.S. manufacturers would be able to avoid the tariff on parts imported from within North America (such as Canada or Mexico) as long as those parts meet USMCA compliance. However, parts that are imported from other countries (such as Europe or Asia) will still be subject to the 25% tariff. The evolving nature of these regulations means that companies will have to continually adapt to new rules, further complicating business decisions. Industry Response: Migration of Production to the U.S. Even prior to the formal announcement of these tariffs, companies had already been adjusting their production strategies in response to the ongoing trade conflict. Automakers like Hyundai had begun shifting investment into U.S. production to reduce their exposure to tariffs. Hyundai's recent announcement to invest $21 billion in the U.S. between 2025 and 2028 is a prime example of this trend. Of this amount, $9 billion will go towards expanding U.S. automobile production capacity to 1.2 million units annually, $6 billion will focus on strengthening supply chains and enhancing parts production, while another $6 billion will be directed towards building future industries such as electric vehicle infrastructure and energy solutions, including EV charging networks. Suppliers are also reconsidering their global supply chains in light of the uncertainty these tariffs introduce. Lear Corporation, a key supplier in the auto industry, has announced it is considering moving production back to the U.S. to mitigate tariff risks. Currently, Lear imports about $2.8 billion worth of parts from Mexico annually, and the tariffs on these parts could significantly impact its bottom line. Moving production back to the U.S. would help protect against these tariffs and support more localized manufacturing, but it also raises concerns about the cost of shifting operations. While some manufacturers may be able to avoid the brunt of the tariff burden by increasing U.S. content in their vehicles, others may have no choice but to reconfigure their supply chains, invest in new U.S.-based production facilities, or even contemplate moving entire production lines to the U.S. These moves represent a shift in the industry towards greater localization in the face of shifting global trade policies. However, this migration is not without its challenges. It could lead to higher costs, disruptions in existing production networks, and a reorganization of workforce strategies. International Reactions and Potential Retaliation The tariff announcement has also sparked reactions from governments around the world, especially from key trading partners like Canada, the European Union, and Japan. Canadian Liberal Party leader Justin Trudeau has already signaled that Canada would retaliate if the U.S. proceeds with these tariffs, further escalating the already tense trade relations. Similarly, Germany's Economic Minister Robert Habeck has called for the European Union to take a firm stance against the U.S. decision, suggesting that Europe may need to introduce its own retaliatory tariffs to protect its own automotive industry. The EU has expressed concerns that these tariffs are a thinly veiled attempt to disadvantage foreign manufacturers and force them to relocate their production to the U.S. The EU, in particular, has highlighted the potentially devastating impact these tariffs could have on European carmakers that rely heavily on exports to the U.S. In response to these mounting concerns, President Trump has threatened further tariffs if Canada and the EU coordinate efforts to economically harm the U.S. This could mean even harsher measures for foreign auto manufacturers, putting additional strain on already delicate international trade relations. The situation remains fluid, with global stakeholders closely monitoring the potential for a tit-for-tat trade war. Companies Impacted The 25% tariffs on foreign-made automobiles and parts set to take effect in April 2025 will significantly impact Canadian companies in the auto sector, particularly those with strong ties to the U.S. market. Key companies at risk include: Magna International and Linamar Corporation, major auto parts suppliers with cross-border supply chains, will face higher costs for importing and exporting components between Canada and the U.S. Canadian vehicle manufacturers (e.g., Ford and GM) with Canadian plants could see reduced demand and may shift production to the U.S. to avoid tariffs. Unifor, the automotive workers' union, could face job losses if companies reduce production in Canada due to tariff-related disruptions. Tier-1 suppliers and smaller manufacturers like Martinrea International could be hurt by tariff increases on parts imported from non-U.S. locations. Emerging EV manufacturers (e.g., Electra Meccanica, Lion Electric) may struggle with higher costs, slowing their market growth in the U.S. Automotive aftermarket companies could see price hikes, affecting demand for replacement parts in Canada. Overall, Canadian auto companies will need to adapt their operations, potentially relocating production or increasing local content to minimize tariff impacts. Broader Implications for the Auto Industry Beyond the direct effects of the tariffs, the trade uncertainty is likely to have broader consequences for the global auto industry. Companies will need to factor in not just the costs of tariffs, but also the potential for ongoing trade disruptions. The complexity of global supply chains means that even slight shifts in trade policy can have ripple effects throughout the industry, from raw materials to finished products. Additionally, this uncertainty is likely to have a significant impact on the long-term strategic planning of automakers. Many companies are already transitioning towards electric vehicles (EVs), autonomous driving technologies, and other innovations that require significant investments in R&D. These tariffs could divert resources away from these forward-looking projects as companies scramble to adjust to the new economic landscape. The outcome of these tariff policies could shape the future of the auto industry for years to come, influencing where and how cars are made, how parts are sourced, and how automakers operate on a global scale. The overall trend may favor increased domestic production in the U.S., but whether this leads to greater resilience or higher costs for both consumers and producers remains to be seen.
Yahoo
10-03-2025
- Automotive
- Yahoo
Lear to Participate in the Wolfe Research Virtual Autos Summit
SOUTHFIELD, Mich., March 10, 2025 /PRNewswire/ -- Lear Corporation (NYSE: LEA), a global automotive technology leader in Seating and E-Systems, will participate in a virtual fireside chat on March 18, 2025, during the Wolfe Research Virtual Autos Summit. Representing Lear will be: Ray Scott, President and CEO Jason Cardew, SVP and Chief Financial Officer Lear's webcast will begin at 10:00 AM EDT and will run approximately 40 minutes. The webcast link will be available on the Company's website at About Lear CorporationLear, a global automotive technology leader in Seating and E-Systems, enables superior in-vehicle experiences for consumers around the world. Lear's diverse team of talented employees in 37 countries is driven by a commitment to innovation, operational excellence, and sustainability. Lear is Making every drive better™ by providing the technology for safer, smarter, and more comfortable journeys. Lear, headquartered in Southfield, Michigan, serves every major automaker in the world and ranks 174 on the Fortune 500. Further information about Lear is available at View original content to download multimedia: SOURCE Lear Corporation
