Lear (LEA) Moves 6.4% Higher: Will This Strength Last?
Lear (LEA) shares soared 6.4% in the last trading session to close at $140.36. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6.1% loss over the past four weeks.
Shares jumped yesterday on upbeat first-quarter 2023 forecasts. Lear's CFO, Jason Cardew, expects first quarter revenues in the band of $5.6-$5.7 billion, up $400-$500 million than the prior year period. He also expects operating income to range within $240-$250 million, up $55-$65 million than the corresponding quarter of 2022.
This automotive seating and electrical distribution systems company is expected to post quarterly earnings of $2.41 per share in its upcoming report, which represents a year-over-year change of +33.9%. Revenues are expected to be $5.21 billion, unchanged compared to the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Lear, the consensus EPS estimate for the quarter has been revised 5.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on LEA going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Lear belongs to the Zacks Automotive - Original Equipment industry. Another stock from the same industry, Visteon (VC), closed the last trading session 3.7% higher at $160.86. Over the past month, VC has returned -1.6%.
For Visteon , the consensus EPS estimate for the upcoming report has changed -6.9% over the past month to $1.29. This represents a change of +18.4% from what the company reported a year ago. Visteon currently has a Zacks Rank of #3 (Hold).
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