ADNT - Embedded Expectations Analysis - 2021 02 12
Adient plc (ADNT:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with a 20.2x Uniform P/E. At these levels, the market has expectations for profitability to positively inflect, but management may be concerned about free cash flow, cost and operational improvement initiatives, and their fabric business divestitureSpecifically, management is also confident launch management will contribute less in 2021 to their earnings growth. In addition, they may lack confidence in their ability to improve free cash flows, expand margins in Europe, and sustain seating equity income growth. Moreover, they may have concerns about the pandemic's impact on the business and supply chain disruptions, and management may lack confidence in their ability to execute their cost reduction and operational improvement initiatives. Finally, they may be concerned about the divestitures of their fabric business and RECARO Automotive Seating, lagging revolver availability, and the sustainability of the global vehicle production recovery
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