Raising Lear Fair Value Estimate to EUR 102 from EUR 95 on Effective Tax Rate Change
We have raised our fair value estimate on the shares of Narrow-moat rated auto seating and electrical supplier Lear by $7 to $102. Morningstar now believes that tax reform under the Trump administration is more likely than not. We assumed a 25% statutory corporate tax rate on Faurecia’s U.S. pretax income, down from the current tax rate of 35%. While U.S. revenue and non-current assets since 2012 have averaged around 21% and 17% of the respective totals, the domestic portion of Lear’s pretax inc...Lear is a supplier to the automotive industry. The company supplies seating, electrical distribution systems and electronic modules, as well as related sub-systems, components and software, to automotive manufacturers. The company has two segments: Seating, which consists of the design, development, engineering, just-in-time assembly and delivery of seat systems, and the design, development, engineering and manufacture of seat components; and E-Systems, which consists of the design, development, engineering and manufacture of electrical distribution systems, and electronic control modules, electrification products, connectivity products and software solutions for the cloud, vehicles and mobile devices.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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