NEW YORK (TheStreet) -- Shares of Lear Corp. (LEA) are leaping higher, up 2.56% to $94.86, after TheStreet's Jim Cramer suggested on CNBC today that the auto equipment maker could be a takeover target.
Also, Barclays (BCS) upgraded Lear to "overweight" from"equal weight" this morning, and raised its price target to $113 from $93.
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, solid stock price performance, increase in net income, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LEA's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 10.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 30.08% and other important driving factors, this stock has surged by 43.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LEA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Auto Components industry average. The net income increased by 12.4% when compared to the same quarter one year prior, going from $108.50 million to $122.00 million.
- LEAR CORP has improved earnings per share by 30.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in 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 ($7.65 versus $4.99).
- The current debt-to-equity ratio, 0.34, 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.
- You can view the full analysis from the report here: LEA Ratings Report
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