Lear Corporation (NYSE:LEA) stock has lost 13% year-to-date and is now trading at a 17% discount to its 10-year average, which makes the valuation compelling, according to Wells Fargo.
The Lear Analyst: Colin Langan upgraded the rating for Lear from Equal Weight to Overweight while raising the price target from $141 to $180.
The Lear Thesis: Auto production is likely to recover in the back half of the year, “with improved semi supply and easing input costs,” Langan said in the upgrade note.
This could result in Lear’s earnings doubling from 2022 to 2023, the analyst said.
“We also see more limited recession downside for suppliers given production is already constrained by the supply chain issue and inventory needs to be rebuilt,” he added.
The company is also poised to benefit from EV growth, while “its e-powertrain products have low in-sourcing risk,” Langan further said.
LEA Price Action:Shares of Lear had risen by 0.60% to $141.67 at the time of publication Tuesday.
