Lear Corporation: Risk Reward Update

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Lear Corporation: Risk Reward Update

UpdateM

RiskRisk RewardReward– Lear Corporation- Lear Corporation(LEA.N) (LEA.N)

Taking the Driver’s Seat on Execution

PRICE TARGET $130.00 EQUAL-WEIGHT THESIS

DCF (FY25 - FY35) with WACC of 10.9%, 2.0% terminal growth rate and ~7.0% exit EBITDA We see a balanced risk/reward profile for

margin. LEA as solid cash flows, a strong balance

Implies a ~9.0x P/E multiple on a $14.66 2026 EPS and ~5.0x 2026 EV/EBITDA sheet, and disciplined capital allocation

offset the structural challenges facing global

$148.75 auto suppliers. LEA remains well positioned

Consensus Price Target Distribution $130.00 $179.00 in its powertrain-agnostic seating business

MS PT while taking a more measured, returns-

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates focused approach to EV-related investment,

which supports stability but limits upside in

a slower EV demand environment. However,

RISK REWARD CHART persistent margin and competitive pressures

in Seating, particularly in Europe, temper the

near-term outlook, reinforcing our Equal-

USD weight rating.

$191.00$191.00(+40.88%)$191.00(+40.88%)(+40.88%)

200 Consensus Rating Distribution

44% Overweight

150 56% Equal-weight

$135.58$135.58$135.58

$130.00$130.00(-4.12%)$130.00(-4.12%)(-4.12%) 0% Underweight

MS Rating

Source: Refinitiv, Morgan Stanley Research

50 $72.00$72.00(-46.89%)$72.00(-46.89%)(-46.89%)

Risk Reward Themes

Electric Vehicles: Positive

0 Secular Growth: Positive

JUN '25 DEC '25 JUN '26 JUN '27

View descriptions of Risk Rewards Themes here

Key: Historical Stock Performance Current Stock Price Price Target

BULL CASE $191.00 BASE CASE $130.00 BEAR CASE $72.00

E-Systems inflection Seating is the star, e-Systems drag reduced EV efforts lead to further margin

degredation