Dallas, Texas 05/02/2014 (FINANCIALSTRENDS) – Lear Corporation (NYSE:LEA) received positive coverage by Citigroup earlier this week on the back of robust 1Q earnings report and a strong outlook for rest of the year, given out by the management team of the South Field based firm. The price target on the stock was also raised from previous recommendation of $90 to $101.
The Buy rating on the stock has been linked to the improved per seat margins the company has been able to generate in the recently concluded 1Q and the likely hood of the momentum being sustained right through the current fiscal, leading to a earnings per share which would range in the $9 to $10 per share.
“Both our business segments reported higher sales and grew faster than the industry in the first quarter. In seating, margins improved from the fourth quarter and operating earnings increased from a year ago. In our electrical business, we again achieved record sales and earnings. In addition to the strong operating performance, we took steps during the quarter to improve our capital structure by extending our debt maturities and lowering our average cost of debt.”
Backed by the big build up in business momentum, the management team of Lear Corporation (NYSE:LEA) felt confident to increase the guidance for 2014. It has increased its sales forecast for 2014to be in the range of $17.2 billion to $17.7 billion as against the previous estimate of $16.9 to $17.4 billion.
Net income was up 12 percent in comparison to 1Q13 to reach $122 million in 1Q14. It reported adjusted earnings per share of $1.84, which was well above analyst estimate of $1.7 and reported revenue of $4.36 billion as against the estimated $4.29 billion by analysts. 1Q14 revenue represented a 10 percent increase over its previous 1Q13 numbers.