Lear Corporation shares rose about 3% after TD Cowen upgraded the auto parts supplier from Hold to Buy and raised its price target from $138 to $165. The move came after Lear delivered a strong first quarter of 2026, reinforcing the view that the company’s fundamentals are improving. As of May 26, LEA traded around $143, near its 52-week high of $145 and below the new analyst target.
Lear reported first-quarter revenue of $5.8 billion, up 5% year over year, while adjusted earnings per share increased 24% to $3.87. That was the company’s highest quarterly EPS since the first quarter of 2019. Core operating earnings rose 10% to $297 million, making the quarter one of the strongest Lear has posted in several years.
The company’s latest results show progress across both of its main businesses: automotive seating and electrical systems. In the quarter, both segments expanded margins, suggesting better operating efficiency and stronger execution. Lear also won a mid-cycle wire harness contract with General Motors for its full-size SUV platform, a notable competitive win that could help support future revenue.
Investor attention is also building around Lear’s growth in China. Chief Executive Officer Ray Scott said the company secured $280 million in new business awards in the first quarter alone, more than all of 2025 combined. New programs with Dongfeng, Geely, SAIC, and BAIC are expected to begin launching as early as mid-2026, giving Lear a pipeline of future business in a key market.
Despite its recent gains, Lear has long traded at a valuation below the broader market. The company’s earnings per share have climbed 61% over the past four years, yet its stock has remained relatively discounted compared with the S&P 500. That gap appears to be one reason analysts are becoming more constructive on the name.
Shareholder returns are another support for the stock. Lear repurchased $75 million of its own shares in the first quarter and is on pace to buy back more than $300 million in 2026. The buyback program adds to the company’s appeal as it combines earnings growth, improving margins, and capital returns.
TD Cowen’s upgrade adds to a broader shift in sentiment around the stock. With stronger quarterly performance, new business wins, rising margins, and continued share repurchases, Lear is starting to attract attention as a company whose market price may not fully reflect its improving operating profile.
