Lear (LEA) PT Raised to $195 at Oppenheimer After E-Systems Day

March 29, 2021 9:06 AM EDT
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Price: $179.01 +0.05%

Rating Summary:
    15 Buy, 12 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 17 | Down: 14 | New: 42
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Oppenheimer analyst James Picariello raised the price target on Lear (NYSE: LEA) to $195.00 (from $185.00) while maintaining a Outperform rating after attending the company's E-Systems Day where LEA provided 2025 targets for E-Systems consisting of ~$7.5B in sales (vs. ~$5.3B guided for 2021) and ~10% operating margins, which now establishes a highly achievable mid-term bar. Electrification revenue is positioned at a +30% CAGR to ~$1B in EV sales (vs. $385M in 2021), of which $725M is already booked.

The analyst stated "We see further upside to this target should GM utilize LEA's battery disconnect unit (est. all-in CPV $600-$800) currently awarded on the GMC Hummer across its Ultium line, which we est. represents $600M-$800M of annualized revenue potential by 2025. Similarly, LEA's battery plug board likely supplies (we est.) ~1.3M VW MEB vehicles by 2025, helping to drive the Co.'s targeted connection systems revenue mix from $450M today to ~$950M by 2025 (incl. $200M-$300M inorganic sales funnel), implying a +12% core CAGR."

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