NEW YORK (TheStreet) -- Citigroup increased its price target on Lear (LEA) - Get Lear Corporation Report to $101, increased its estimates and set a "buy" rating. The company's recent strong quarter drove the firm's decision.
The stock was up 0.52% to $83.54 at 9:34 a.m. on Monday.
Separately, TheStreet Ratings team rates LEAR CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LEAR CORP (LEA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LEA's revenue growth has slightly outpaced the industry average of 7.3%. Since the same quarter one year prior, revenues rose by 14.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.95 is somewhat weak and could be cause for future problems.
- Compared to its closing price of one year ago, LEA's share price has jumped by 57.33%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Net operating cash flow has slightly increased to $390.50 million or 5.79% when compared to the same quarter last year. Despite an increase in cash flow, LEAR CORP's cash flow growth rate is still lower than the industry average growth rate of 35.59%.
- LEAR CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, LEAR CORP reported lower earnings of $4.99 versus $13.00 in the prior year. This year, the market expects an improvement in earnings ($7.53 versus $4.99).
- You can view the full analysis from the report here: LEA Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.