Goldman Sachs Sees 12% Downside in Lear (LEA) and Cuts Rating to 'Sell'
- Wall St. rises amid robust GDP data, mixed earnings
- ExxonMobil (XOM) Tops Q3 EPS by 5c; CapEx Light of Views
- Baker Hughes (BHI), General Electric (GE) in Partnership Talks, Not Merger Talks
- AbbVie (ABBV) Tops Q3 EPS by 1c; Boosts FY16 EPS Outlook
- Amazon.com (AMZN) Misses Q3 EPS by 26c, Offers Q4 Guidance
Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.
(Updated - October 6, 2016 8:47 AM EDT)
Goldman Sachs downgraded Lear (NYSE: LEA) from Neutral to Sell with a price target of $107.00 (from $116.00), implying downside of 12%. Analyst David Tamberrino thinks the U.S. auto cycle peaked in 2015, and he said expectations for Lear are too high.
"While shares have been resilient vs. peers over the last 12-months, gaining 10.8% vs. our Autos coverage average decline of 0.1% and the S&P 500 +10.2% as the company has continued to beat and raise its own guidance multiple times, we believe both investor and Street consensus expectations have grown accustomed to the company’s achievable guidance outlook. As a result, we believe shares are more than fairly valued and could see a pullback on only achieving current earnings expectations," said Tamberrino.
"In addition, with the Johnson Controls Automotive business re-investing and increasing its bidding activity, we expect incremental competition to weigh on future new business awards. Lastly, being a commoditized segment, seating could see incremental pricing pressure in the later stages of the NA auto cycle," added the analyst.
Shares of Lear closed at $124.46 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Wedbush Remains Bullish on Amazon.com (AMZN) Following 3Q
- Argus Downgrades Tractor Supply Company (TSCO) to Hold
- FBR Capital Cuts Price Target on Government Properties Income Trust (GOV) to $25
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Analyst PT Change, Downgrades, Hot Downgrades
Related EntitiesGoldman Sachs, Standard & Poor's, Earnings
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!