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Lear (LEA) is a Top-Ranked Value Stock: Should You Buy?

·2 min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

Lear (LEA)

Southfield, MI-based Lear Corporation is a Tier 1 supplier to the global automotive industry. The company supplies automotive seating and electrical systems (E-Systems). It caters to several major automakers in the world. The primary customers of the company are automotive original equipment manufacturers (OEMs). Lear’s products are designed, engineered and manufactured by a team of around 160,100 employees, located in 38 countries.

LEA is a Zacks Rank #3 (Hold) stock, with a Value Style Score of A and VGM Score of A. Shares are currently trading at a forward P/E of 17.2X for the current fiscal year compared to the Automotive - Original Equipment industry's P/E of 13X. Additionally, LEA has a PEG Ratio of 0.5 and a Price/Cash Flow ratio of 8.4X. Value investors should also note LEA's Price/Sales ratio of 0.5X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Two analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $0.24 to $8.58 per share. LEA has an average earnings surprise of 14.4%.

Investors should take the time to consider LEA for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.


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