Financial Data and Key Metrics Changes - Lear Corporation reported a 5% increase in revenue for Q4 2025, totaling $23.3 billion for the full year, with core operating earnings at $1.1 billion, representing 4.6% of net sales [4][27] - Adjusted earnings per share rose to $12.80, marking a 1% increase from 2024, and operating cash flow was $1.1 billion, with free cash flow at $527 million for 2025 [4][28] Business Line Data and Key Metrics Changes - In the Seating segment, sales for 2025 were $17.3 billion, a slight increase of 0.4% from 2024, while adjusted earnings were $1.1 billion, down 1% compared to the previous year [35][36] - E-Systems sales decreased by 2% to $6 billion for 2025, with adjusted earnings at $293 million, or 4.9% of sales, compared to 5.1% in 2024 [36][37] Market Data and Key Metrics Changes - Global vehicle production increased by 1% year-over-year, with production volumes flat in North America, down 2% in Europe, and up 3% in China [31] - Lear expects more than 50% of its revenue in China to come from domestic automakers next year, driven by strong relationships with local teams [23] Company Strategy and Development Direction - Lear's strategic priorities focus on extending leadership in Seating, expanding margins in E-Systems, and supporting sustainable value creation through disciplined capital allocation [5][10] - The company aims to achieve a seating market share of 29%, leveraging innovation and technology to drive growth and maintain competitive advantages [60][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue, operating income, margins, and free cash flow growth in 2026, supported by a robust backlog of $1.325 billion [29][41] - The company anticipates continued strong performance in automation and digital transformation initiatives, which are expected to drive future savings and operational improvements [66][67] Other Important Information - Lear repurchased $325 million in shares during 2025, exceeding the initial target of $250 million, and returned nearly $500 million to shareholders through dividends and buybacks [10][11] - The company has a strong focus on automation and digital tools, which have led to significant operational efficiencies and cost savings [17][18] Q&A Session Summary Question: Can you discuss the conquest win and its impact on seating share aspirations? - Management highlighted the significance of the conquest win as the largest in Lear's history, emphasizing innovation and technology as key factors in securing the award [53][54] Question: What is the outlook for Net Performance in 2026? - Management indicated that they expect similar levels of Net Performance in 2026, driven by digital and automation initiatives under the IDEA program [63][64] Question: How should investors think about earnings cadence throughout the year? - Management noted a strong start to the year, with expectations for revenues around $6 billion and operating income near $260 million for Q1, despite some anticipated downtime [70][71] Question: What is the potential for onshoring wins and their timing? - Management confirmed that the Orion award will benefit 2027, with limited additional onshoring opportunities expected until 2028 and 2029 [75][76] Question: Can you provide estimates for the large conquest win's revenue potential? - Management indicated that the program is outside the backlog window and is expected to launch in late 2028, potentially generating $400 million-$500 million in annual revenue [81][82]

Financial Data and Key Metrics Changes - Revenue for Q1 2026 was $3.6 billion, a 4% increase year-over-year, primarily driven by foreign exchange tailwinds and favorable volume and pricing [25][27] - Adjusted EBITDA improved by 10 basis points year-over-year to 5.7%, totaling $207 million [26][28] - Adjusted net income was $28 million or $0.35 per share during the quarter [26] Business Line Data and Key Metrics Changes - In the Americas, consolidated sales were generally in line with the broader market, while EMEA sales trailed the market due to customer mix and portfolio actions [27] - Asia outperformed, driven by significant growth in China as new programs with domestic OEMs ramped up [27] Market Data and Key Metrics Changes - North America vehicle production is expected to be around 15 million units for fiscal year 2026, up from previous guidance of 14.6 million [36] - China is expected to continue double-digit growth through fiscal year 2028, despite flat overall vehicle production [12] Company Strategy and Development Direction - The company is focused on onshoring opportunities, with approximately $500 million in potential revenue from onshoring and conquest wins [12][43] - Investments in automation are expected to ensure continued positive business performance, with most projects having a payback under two years [10] - The introduction of Modutec, a modular seat design solution, aims to enhance manufacturing efficiency and support onshoring priorities [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering solid business performance due to a resilient operating model and positive production volume trends [9][10] - The company raised its guidance for revenue, adjusted EBITDA, and free cash flow for the fiscal year 2026 [36][37] Other Important Information - The company generated $15 million of free cash flow in Q1 2026, higher than internal expectations [32] - Total liquidity was $1.7 billion, comprised of $855 million in cash and $823 million in undrawn capacity under a revolving line of credit [34] Q&A Session Summary Question: Impact of potential disruptions on F-150 F-Series recovery - Management indicated that they are monitoring the situation and will provide updates based on Ford's guidance [40][41] Question: Update on onshoring opportunities - The company confirmed that onshoring opportunities have increased to $500 million, including a significant domestic OE production move from Mexico to the U.S. [43][45] Question: Progress on European restructuring - Management noted that restructuring spend in Europe is expected to be around $120 million to $130 million in fiscal year 2026, with a decrease anticipated in fiscal year 2027 [52][53] Question: Sustainability and commercial settlements - Management clarified that commercial settlements are part of normal business operations and timing mismatches are expected [60][62] Question: Growth opportunities in Asia and Europe - Management highlighted ongoing discussions with customers regarding onshoring and potential growth in the 2028-2029 timeframe, while also addressing competitive pressures from Chinese imports in Europe [71][82]

FY26 First Quarter Earnings Call February 4, 2026 Important Information Adient has made statements in this document that are forward-looking and, therefore, are subject to risks and uncertainties. All statements in this document other than statements of historical fact are statements that are, or could be, deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In this document, statements regarding Adient's expectations for its deleveraging activities ...

Core Viewpoint - Adient reported its first quarter 2026 financial results, highlighting a net loss but improved adjusted earnings and guidance for the fiscal year [1][6]. Financial Performance - Q1 GAAP net loss was $22 million, with diluted EPS of $(0.28); however, adjusted EPS was $0.35 [6]. - Adjusted EBITDA for Q1 was $207 million, reflecting an $11 million year-over-year improvement, with adjusted EBITDA margins increasing from 5.6% to 5.7% [6]. - Gross debt and net debt stood at approximately $2.4 billion and $1.5 billion, respectively, as of December 31, 2025, with cash and cash equivalents of $855 million [6]. Shareholder Returns - The company returned $25 million to shareholders in Q1 FY2026 through the repurchase of approximately 1.2 million shares [6]. Future Guidance - Adient raised its FY26 guidance for revenue, adjusted EBITDA, and free cash flow to $14.6 billion, $880 million, and $125 million, respectively, supported by an improved vehicle production outlook and expectations of continued positive business performance [6]. Company Overview - Adient is a global leader in automotive seating, employing over 65,000 people across 29 countries and operating around 200 manufacturing and assembly plants worldwide [4]. - The company produces automotive seating for all major OEMs, covering the entire process from research and design to manufacturing [4].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Adient (ADNT) as a strong value stock based on its favorable valuation metrics and earnings outlook [2][7]. Group 1: Value Investing Strategy - Value investing focuses on identifying companies that are undervalued by the market, relying on traditional analysis of key valuation metrics [2]. - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly in the "Value" category, which is of interest to value investors [3]. Group 2: Adient (ADNT) Valuation Metrics - Adient (ADNT) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4]. - The stock's P/E ratio is 11.5, significantly lower than the industry average of 17.57, suggesting it may be undervalued [4]. - ADNT's PEG ratio is 0.82, which is slightly below the industry average of 0.84, indicating favorable earnings growth expectations [5]. - The P/CF ratio for ADNT is 19.42, which is attractive compared to the industry average of 25.98, further supporting its undervaluation [6].

Core Insights - The ModuTec assembly process significantly reduces assembly time from minutes to seconds, enhancing efficiency and lowering costs while enabling unprecedented automation in the automotive seating industry [1][2]. Group 1: ModuTec Assembly Process - ModuTec allows for offline assembly of seat modules, which are then integrated into the main Just-In-Time (JIT) line [1]. - This innovative approach is expected to transform manufacturing by simplifying production workflows and enhancing overall assembly efficiency [5]. Group 2: Industry Impact - The introduction of ModuTec represents a fundamental shift in how vehicle seats are manufactured, emphasizing cost efficiency, engineering criteria, and manufacturing best practices [2][3]. - Adient's vice president highlighted that ModuTec is a bold step towards the future of the automotive seating industry [2]. Group 3: Company Overview - Adient is a global leader in automotive seating, employing over 65,000 people across 29 countries and operating approximately 200 manufacturing and assembly plants worldwide [4]. - The company provides comprehensive automotive seating solutions for all major Original Equipment Manufacturers (OEMs), covering every aspect from research and design to engineering and manufacturing [4].

Core Insights - The article emphasizes the importance of the price-to-book (P/B) ratio as a valuation tool for identifying undervalued stocks with high growth potential, alongside more commonly used ratios like price-to-earnings (P/E) and price-to-sales (P/S) [1][5]. Group 1: Understanding P/B Ratio - The P/B ratio is calculated by dividing market capitalization by the book value of equity, helping investors assess whether a stock is under- or overvalued [1][5]. - A P/B ratio of less than one indicates that a stock is trading below its book value, suggesting it may be undervalued and a good buy, while a ratio above one may indicate overvaluation [5][6]. - The P/B ratio is particularly relevant for industries with tangible assets, such as finance and manufacturing, but may be misleading for companies with high R&D expenses or negative earnings [8]. Group 2: Stock Recommendations - Five stocks with low P/B ratios and strong growth potential are highlighted: BioMarin Pharmaceutical (BMRN), General Motors (GM), Harmony Biosciences (HRMY), Adient plc (ADNT), and Gibraltar Industries (ROCK) [2][9]. - BioMarin Pharmaceutical has a projected 3-5 year EPS growth rate of 20.11% and holds a Zacks Rank of 2 with a Value Score of A [15]. - General Motors is projected to have a 3-5 year EPS growth rate of 10.65% and has a Zacks Rank of 1 with a Value Score of A [16]. - Harmony Biosciences has a projected 3-5 year EPS growth rate of 25.66% and a Zacks Rank of 2 with a Value Score of A [16]. - Adient has a projected 3-5 year EPS growth rate of 15.7% and a Zacks Rank of 2 with a Value Score of A [17]. - Gibraltar Industries has a projected 3-5 year EPS growth rate of 15.0% and a Zacks Rank of 2 with a Value Score of A [18].

Core Insights - The year 2025 began with strong optimism for stock prices, but this was quickly challenged by low-cost AI initiatives from China, tariff issues, high inflation, and elevated interest rates [1] - Investor sentiment improved midyear as trade tensions eased and the Federal Reserve cut interest rates three times, but a U.S. government shutdown and concerns over AI sector valuations dampened enthusiasm [2] Investment Opportunities - Despite market volatility, investing in stocks remains viable; following broker recommendations and maintaining a watchlist of broker-favorite stocks can be beneficial [3][4] - A screening strategy was developed to identify stocks with improving broker recommendations and upward earnings estimate revisions, utilizing the price/sales ratio as a complementary valuation metric [5][6] Stock Highlights - Bunge Global SA (BG) is undergoing a strategic overhaul with the Viterra merger to enhance global scale and long-term returns; it has surpassed earnings estimates in three of the last four quarters with an average beat of 11.75% [8][9] - Air Canada (ACDVF) has seen a 98.9% increase in earnings estimates for 2026 due to strong travel demand and lower fuel costs, surpassing earnings estimates in two of the last four quarters [9][10] - Adient (ADNT), a major automotive seating supplier, has a strong market position with a 23.62% average earnings beat over the last four quarters [11] - Arrow Electronics (ARW) has a projected EPS growth rate of 10.7% over the next 3-5 years and has consistently surpassed earnings estimates, with an average beat of 14.6% [12][13] - ChargePoint Holdings (CHPT) is a leader in EV charging, recently launching a next-gen software platform; its earnings estimates for fiscal 2026 and 2027 suggest year-over-year improvements of 32.4% and 35.8%, respectively [14][15]

Financial Data and Key Metrics Changes - The company reported Q4 sales of $3.7 billion, a 4% increase compared to fiscal year 2024, with adjusted EBITDA of $226 million and an adjusted EBITDA margin of 6.1% [21][22] - Full year sales totaled approximately $14.5 billion, down 1% year over year, while adjusted EBITDA remained flat at $881 million [23][24] - Free cash flow for the year was $204 million, exceeding the high end of guidance, with $125 million returned to shareholders through share buybacks [4][5][31] Business Line Data and Key Metrics Changes - The Americas saw a margin expansion of 40 basis points for the full year, driven by lower launch costs and commercial actions despite a $17 million net tariff impact [28] - EMEA results were negatively impacted by a $36 million headwind from volume mix due to lower customer production volumes, although positive business performance of $17 million was noted [29] - In Asia, business performance contributed a $34 million tailwind, offsetting a $33 million volume mix headwind due to lower sales in China [29] Market Data and Key Metrics Changes - Sales in China trailed the market due to production declines from traditional premium OEM customers, while the rest of Asia outperformed due to prior customer launches ramping to full production [25] - The company expects to achieve double-digit growth over market in China and mid-single-digit growth in North America by 2027 [13][70] Company Strategy and Development Direction - The company is focusing on automation and AI integration to enhance operational efficiency and drive long-term growth [9][14] - A new strategic partnership in China aims to deepen engagement with leading OEMs and strengthen competitive positioning [13] - The company is committed to driving sustainable value through innovation and operational excellence, with a focus on winning new business and improving customer collaboration [12][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from customer volume reductions and dynamic tariff policies but emphasized strong business execution and cash generation [4][5] - The outlook for fiscal year 2026 includes anticipated revenue declines in North America and Europe, partially offset by growth in China [34][39] - Management remains optimistic about future growth, particularly in China, and is focused on mitigating risks associated with tariffs and geopolitical factors [18][39] Other Important Information - The company has a strong liquidity position with $1.8 billion in total liquidity, including $958 million in cash and $814 million in undrawn credit [32][33] - The company plans to continue share repurchases and manage capital allocation prudently, with $135 million remaining in the share repurchase authorization [43] Q&A Session Summary Question: Can you provide insights on the 1% forecast underperformance versus S&P? - Management indicated that the underperformance is primarily due to F-150 downtime and the wind down of unprofitable business in Europe, which together account for the 1% drag [46][48] Question: What factors contribute to the high decremental volume mix? - The high decremental is attributed to unexpected F-150 downtime and Nexperia chip shortages, which have significantly impacted production and margins [51][52] Question: Can you elaborate on the $85 million investment for future growth? - The investment is essential for driving growth, with a focus on automation and AI, expected to yield significant savings over time [61][62] Question: What is the line of sight for growth over market in 2027? - Management expressed confidence in growth driven by customer launches in China and improved execution from Japanese OEMs in North America [70][71] Question: What are the expectations for revenue margins in Q1 2026? - Management anticipates a potential decline in EBITDA of $15 million to $20 million year on year due to production disruptions [84][86]

Financial Performance - FY25 - Consolidated revenue reached approximately $14.5 billion, a decrease of 1% year-over-year[12] - Adjusted EBITDA remained flat year-over-year at $881 million[12] - Free cash flow was reported at $204 million[12] - The company repurchased approximately 7% of its shares outstanding, amounting to $125 million in capital return[12] Q4 FY25 Highlights - Consolidated sales increased by 4% year-over-year, reaching $3.7 billion[13] - Adjusted EBITDA for Q4 FY25 was $226 million, with a margin of 6.1%[13] - Strong free cash flow generation of $134 million was achieved during the quarter[13] FY26 Outlook - Sales are projected to be approximately $14.4 billion due to lower expected production volumes[88] - Adjusted EBITDA is expected to be around $845 million, influenced by business performance offsetting volume headwinds[88] - Free cash flow is forecasted at approximately $90 million, impacted by timing shifts and increased growth spending[88] Regional Sales Performance (Q4 FY25) - Americas sales outperformed the market by 100 bps due to favorable volume/mix[51] - EMEA sales underperformed the market by 400 bps mainly due to customer mix[51]