Here's Why You Should Offload Lear Stock From Your Portfolio Now

Lear Corporation LEA, a supplier of automotive seating and electrical systems (E-Systems), is struggling with economic uncertainty and labor scarcity for wire harness production in the United States.Let us see why you should offload this Zacks Rank #4 (Sell) stock from your portfolio.Uncertain Macro Backdrop, Labor Scarcity to Hurt LEAOngoing global trade negotiations are creating uncertainty for the economy and the automotive industry. Lear is managing both direct tariff impacts and unclear indirect effects on production volume and mix. Since February, global production forecasts for 2025 have worsened, with it now expecting a 4% decline on a Lear-weighted basis compared with the 2% previously guided. The anticipated decline in global production is likely to hurt the company’s top line in 2025.The company is facing a major roadblock to moving wire harness production to the United States because of labor scarcity. The wire harness is subject to the 25% tariff, which increases the cost for the company. While just-in-time seat assembly offers attractive, skilled jobs, wire harness production remains highly labor-intensive and less appealing to workers. Despite progress, automation for harnesses is not fully developed, making relocation to the United States difficult due to workforce and technology limitations.Lear has a concentrated customer base. Six major customers, i.e., BMW, Jaguar, Land Rover, Volkswagen, Mercedez-Benz and BYD, accounted for more than 50% of its total sales in 2024. Losing business with any of these customers would significantly impact the company's top-line growth.The Zacks Consensus Estimate for LEA’s 2025 sales and earnings per share indicates a year-over-year decline of 5.04% and 7.21%, respectively. The consensus estimate for earnings for 2026 has moved down a penny in the past seven days. Stocks to ConsiderSome better-ranked stocks in the auto space are Hesai Group HSAI, Ferrari N.V. RACE and Standard Motor Products, Inc. SMP. HSAI & RACE sport a Zacks Rank #1 (Strong Buy) each, while SMP carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for HSAI’s 2025 earnings indicates year-over-year growth of 336.36%. EPS estimates for 2026 have improved 12 cents in the past 30 days.The Zacks Consensus Estimate for RACE’s 2025 sales and earnings implies year-over-year growth of 12.37% and 4.8%, respectively. EPS estimates for 2025 and 2026 have improved 30 cents and 36 cents, respectively, in the past seven days.The Zacks Consensus Estimate for SMP’s 2025 sales and earnings implies year-over-year growth of 17.1% and 12.62%, respectively. EPS estimates for 2025 and 2026 have improved 6 cents and 2 cents, respectively, in the past 30 days.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Standard Motor Products, Inc. (SMP): Free Stock Analysis Report Lear Corporation (LEA): Free Stock Analysis Report Ferrari N.V. (RACE): Free Stock Analysis Report Hesai Group Sponsored ADR (HSAI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks