Financial Performance - Consolidated net sales increased by approximately 1% year-over-year to ~$3.7 billion in Q3 FY25[11] - Adjusted EBITDA increased by $24 million year-over-year to $226 million in Q3 FY25, with a margin increase of 60 bps[11, 12] - Free cash flow was $115 million in Q3 FY25[11] - The company returned $50 million to shareholders through share repurchases in Q3, bringing the year-to-date total to $75 million, representing approximately 4% of shares outstanding[11, 12] - Adient is raising its FY25 revenue and EBITDA guidance[12] Regional Performance - Americas sales outperformed the market by 300 bps due to favorable volume/mix and full run-rate of key programs[32] - EMEA sales underperformed the broader market mainly due to customer mix and intentional portfolio actions[32] - Asia sales growth outpaced the broader market by 700 bps, driven by customer launches reaching full production volumes[32] Debt and Capital Structure - Cash balance was $860 million as of June 30, 2025[11] - Gross debt was approximately $2.4 billion and net debt was approximately $1.5 billion[11] - Net leverage ratio on a trailing twelve-month basis is 1.7x, within the targeted range of 1.5x-2.0x[44] Outlook - Consolidated revenue is expected to be approximately $14.4 billion[46] - Adjusted EBITDA is expected to be approximately $875 million[46] - Capital expenditures are expected to be approximately $150 million-$170 million[46]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores provide a framework for evaluating stocks based on value, growth, and momentum [2][3][4][5][6] Zacks Style Scores - Each stock is rated from A to F based on value, growth, and momentum characteristics, with A being the highest score [3] - The Value Score focuses on identifying undervalued stocks using metrics like P/E and Price/Cash Flow [3] - The Growth Score assesses a company's future prospects through projected earnings and sales [4] - The Momentum Score identifies trends in stock prices and earnings estimates to optimize trading timing [5] - The VGM Score combines all three Style Scores to highlight stocks with the best overall potential [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to aid in stock selection [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 top-rated stocks available, making the selection process complex [9] Investment Strategy - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks with a 3 (Hold) rank should also have A or B Scores to ensure potential upside [10] - A stock with a 4 (Sell) or 5 (Strong Sell) rating, even with high Style Scores, is likely to decline in value [11] Company Spotlight: Adient PLC - Adient PLC is a leading automotive seating supplier with strong ties to major global OEMs [12] - The company holds a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating solid performance potential [12] - Adient's Value Style Score is A, supported by a forward P/E ratio of 11.64, making it attractive to value investors [13] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate increasing by $0.14 to $1.87 per share [13] - Adient has an average earnings surprise of +18.3%, further enhancing its investment appeal [13]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1][2] Zacks Style Scores - Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum characteristics, serving as complementary indicators to the Zacks Rank [3][4] - Each stock is rated from A to F, with A indicating the highest potential for outperforming the market [4] Value Score - The Value Style Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [4] Growth Score - The Growth Style Score assesses a company's financial health and future outlook by analyzing projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Style Score evaluates stocks based on price trends and earnings outlook changes, helping investors identify optimal buying opportunities [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who want to consider value, growth, and momentum simultaneously [7] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to guide investors in portfolio creation [8] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +23.62% since 1988, significantly outperforming the S&P 500 [9] Stock Example: Adient (ADNT) - Adient PLC, a major automotive seating supplier, holds a 3 (Hold) rating on the Zacks Rank and has a VGM Score of A [12] - The company has a Value Style Score of A, supported by a forward P/E ratio of 12.32, making it attractive for value investors [13] - Recent upward revisions in earnings estimates for fiscal 2025 have increased the Zacks Consensus Estimate by $0.06 to $1.87 per share, with an average earnings surprise of +18.3% [13]

Financial Performance - Adient's Q2 FY25 consolidated revenue was approximately $3.6 billion, a decrease of 4% year-over-year[11, 36] - Adjusted EBITDA for Q2 FY25 was $233 million, an increase of $6 million year-over-year, with an adjusted EBITDA margin of 6.5%, up 40 bps year-over-year[11, 36, 40] - Free cash flow for Q2 FY25 was negative $90 million[11, 43] - The company maintains a strong cash balance of $754 million as of March 31, 2025[11] - Gross debt and net debt were approximately $2.4 billion and $1.6 billion, respectively[11] Tariff Mitigation - Adient estimates approximately monthly tariff exposure of $8 million, with the largest exposure concentrated from goods coming from China[14, 15, 17] - The company has mitigated over 75% of tariff risk and is actively working to close the gap with customers, targeting 100% recovery/cost offsets[16, 17, 21] - Approximately 95% of Adient's parts produced in Mexico and Canada and shipped to the U S are USMCA compliant, representing about $100 million monthly imports[17] Regional Performance - Americas sales outperformed the market by 700 bps due to favorable volume/mix and slow ramping launches on high-volume customer programs last year[39] - EMEA sales were mostly in line with the broader market[39] - Sales in China underperformed industry production primarily due to production declines from traditional luxury OEMs[39] - Growth in the rest of Asia outpaced the broader market by 300 bps, driven by new customer launches in H2FY24 reaching full production volumes[39] Outlook - Adient maintains its FY25 revenue and adjusted EBITDA outlook, expecting positive momentum from H1 to carry into H2, excluding potential tariff-related volume impacts[12, 58] - Free cash flow is now forecast between $150 million and $170 million, influenced by the timing of customer recoveries and potential acceleration of European restructuring cash costs[59]