) hit a new 52-week high of $62.29 on Jul 1, which is above its
previous level of $61.51 on May 22, and closed at $61.55 on the
same date. The closing price represented a strong one-year return
of 65.2% and year-to-date return of 30.5%.
Lear Corporation designs, manufactures, assembles and supplies
automotive seat systems, electrical distribution systems, and
related components primarily to automotive original equipment
manufacturers mainly in North America, South America, Europe and
Asia. It has a market cap of $5.6 billion. Average volume of
shares traded over the last three months stood at approximately
Shares of LEA started escalating due to improving fundamentals in
the automobile parts market. However, the company failed to
impress investors with its first-quarter results on Apr 25.
Lear posted a 5.8% fall in adjusted earnings per share to $1.30
in the first quarter of 2013 from $1.38 in the corresponding
quarter last year. However, earnings per share comfortably
outpaced the Zacks Consensus Estimate of $1.09. Net income
declined 11.1% to $124.4 million from $140.0 million in the
Revenues increased 8.3% to $3.9 million in the reported quarter,
surpassing the Zacks Consensus Estimate of $3.7 million. However,
global industry production decreased 1% year over year, with an
8% fall in Europe. Production improved 12% in China and 1% in
Not only Lear, shares of other auto parts maker such as
Magna International Inc.
Johnson Controls Inc.
) are also reaching 52-week highs due to continuous improvements
in the market. Investors believe that the recessionary conditions
in the industry no longer exist.
Two of the company's biggest markets, North America (which
contributed 39.2% to its 2012 revenues) and Europe (35.0%) are
expected to rebound significantly in the coming years. Further,
Lear's three largest customers - GM, Ford and BMW, together
accounting for more than 50% of revenues - are expected to
perform well in the near-term
Currently, LEA retains a Zacks Rank #2 (Buy).
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