Adient (ADNT) AI Stock Analysis

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Adient

(NYSE:ADNT)

61Neutral

Adient's overall score reflects a moderate financial performance with positive cash management and improving profitability. However, significant valuation concerns and weak technical indicators weigh on the score. The earnings call highlighted resilience amidst challenges, and corporate events showed strong shareholder backing.

Adient (ADNT) vs. S&P 500 (SPY)

Market Cap

$997.96M

Dividend YieldN/A

Average Volume (3M)2.07M

Price to Earnings (P/E)674.5

Beta (1Y)1.17

Revenue Growth-5.42%

EPS Growth-99.08%

CountryUS

Employees70,000

SectorConsumer Cyclical

Sector Strength55

IndustryAuto - Parts

Share Statistics

EPS (TTM)0.01

Shares Outstanding83,932,690

10 Day Avg. Volume1,784,095

30 Day Avg. Volume2,067,994

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.08

Price to Cash Flow (P/CF)2.70

P/FCF Ratio2.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$16.50

Price Target Upside55.81% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering7

Adient Business Overview & Revenue Model

Company DescriptionAdient (ADNT) is a leading global automotive seating supplier that designs, manufactures, and markets a wide range of seating solutions for all major automakers. With operations spanning across multiple countries, Adient provides innovative seating products that enhance comfort, safety, and performance. The company focuses on seating systems, components, and mechanisms, catering to a diverse portfolio of vehicles from entry-level to luxury models.

How the Company Makes MoneyAdient makes money primarily through the sale of automotive seating systems and components to original equipment manufacturers (OEMs) in the automotive industry. Its revenue model is centered around long-term contracts with major car manufacturers, under which it designs and supplies seating solutions tailored to specific vehicle models. Key revenue streams include sales of complete seating systems, seat frames, trim covers, and other related components. Additionally, Adient engages in strategic partnerships and joint ventures to expand its market reach and enhance technological capabilities, contributing to its earnings. The company's global presence and extensive production capabilities enable it to efficiently serve its clients and maintain a competitive edge in the automotive seating market.

Adient Financial Statement Overview

Summary

Adient shows moderate financial performance with improvements in profitability margins and cash flow management, despite inconsistent revenue growth and leverage concerns.

Income Statement

Positive

Adient's income statement shows a moderate performance. The gross profit margin is 6.36% for TTM, reflecting a challenging cost environment. Net profit margin improved to 0.16% TTM, showing a turnaround from previous losses. Revenue growth has been inconsistent, with a decline observed in the latest TTM period. However, EBIT and EBITDA margins stand at 3.06% and 4.72% respectively, indicating some operational efficiency gains.

Balance Sheet

Positive

The balance sheet of Adient is relatively stable. The debt-to-equity ratio is 1.28 TTM, which is manageable but indicates significant leverage. Return on equity improved to 1.23% TTM, showing positive returns but room for improvement. The equity ratio of 21.99% suggests a balanced capital structure, although reliant on debt.

Cash Flow

Positive

Adient's cash flow statement is strong, with a significant improvement in free cash flow growth rate. The operating cash flow to net income ratio is robust, indicating good cash conversion, and the free cash flow to net income ratio is also positive. This suggests that the company is effectively managing its cash resources.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
14.52B	14.69B	15.39B	14.12B	13.68B	12.67B
	Gross Profit
924.00M	928.00M	1.03B	807.00M	826.00M	592.00M
	EBIT
445.00M	421.00M	479.00M	294.00M	1.80B	42.00M
	EBITDA
769.00M	656.00M	776.00M	644.00M	2.13B	119.00M
	Net Income Common Stockholders
23.00M	101.00M	205.00M	-40.00M	1.11B	-486.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
60.00M	945.00M	1.11B	947.00M	1.52B	1.69B
	Total Assets
0.00	9.35B	9.42B	9.16B	10.76B	10.26B
	Total Debt
0.00	2.40B	2.54B	2.58B	3.70B	4.31B
	Net Debt
60.00M	1.45B	1.43B	1.63B	2.17B	2.62B
	Total Liabilities
0.00	6.82B	6.82B	6.74B	7.80B	8.68B
	Stockholders Equity
5.64B	2.13B	2.23B	2.07B	2.38B	1.21B
Cash Flow		Free Cash Flow
331.00M	277.00M	415.00M	47.00M	0.00	-80.00M
	Operating Cash Flow
606.00M	543.00M	667.00M	274.00M	260.00M	246.00M
	Investing Cash Flow
-243.00M	-253.00M	-229.00M	484.00M	347.00M	166.00M
	Financing Cash Flow
-444.00M	-502.00M	-271.00M	-1.27B	-770.00M	393.00M

Adient Technical Analysis

Technical Analysis Sentiment

Negative

Last Price10.59

Price Trends

50DMA

15.09

Negative

100DMA

16.69

Negative

200DMA

19.57

Negative

Market Momentum

MACD

-0.75

Positive

RSI

33.06

Neutral

STOCH

14.18

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADNT, the sentiment is Negative. The current price of 10.59 is below the 20-day moving average (MA) of 13.13, below the 50-day MA of 15.09, and below the 200-day MA of 19.57, indicating a bearish trend. The MACD of -0.75 indicates Positive momentum. The RSI at 33.06 is Neutral, neither overbought nor oversold. The STOCH value of 14.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ADNT.

Adient Risk Analysis

Adient disclosed 36 risk factors in its most recent earnings report. Adient reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Adient Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
APTV	70 Outperform	$12.49B	7.19	17.57%	―	-1.69%	-33.56%
VC	70 Outperform	$2.00B	6.83	24.17%	―	-2.23%	-42.94%
ALV	66 Neutral	$6.45B	10.36	26.69%	3.31%	-0.80%	39.95%
LEA	64 Neutral	$4.44B	9.24	10.81%	3.72%	-0.70%	-7.27%
BWA	62 Neutral	$5.91B	17.88	6.46%	1.64%	-11.10%	-46.32%
ADNT	61 Neutral	$997.96M	674.52	-0.10%	―	-5.42%	-99.08%
Sector *	59 Neutral	$11.76B	10.11	-0.70%	3.92%	1.27%	-16.30%

* Consumer Cyclical Sector Average

Performance Comparison

ADNT

Adient

10.59

-20.54

-65.98%

ALV

Autoliv

79.70

-35.06

-30.55%

BWA

BorgWarner

25.67

-8.38

-24.61%

APTV

Aptiv

49.42

-26.35

-34.78%

LEA

Lear

76.33

-56.65

-42.60%

Visteon

67.04

-46.61

-41.01%

Adient Earnings Call Summary

Earnings Call Date: Jan 28, 2025 | % Change Since: -38.82% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Neutral

Adient reported strong financial performance with improved EBITDA and cash flow, despite facing revenue declines and market challenges in China and EMEA. The company made significant sustainability advancements and won substantial new business in China, but is dealing with macroeconomic pressures and industry headwinds.

Highlights

Improved Business Performance

Adient achieved $196 million of adjusted EBITDA and generated $45 million in free cash flow despite a 5% year-over-year decline in revenue. Decremental margins were contained to approximately 12%, below the typical 18%.

Strong Balance Sheet and Share Repurchases

Adient's balance sheet remains strong with ample liquidity, including $860 million of cash on hand at the end of Q1. The company repurchased $25 million in stock in Q1, bringing total share repurchases so far in fiscal 2025 and 2024 to $300 million.

Sustainability Achievements

Adient reported a 38% reduction in Scope 1 and Scope 2 greenhouse gas emissions from the base year and 29% utilization of renewable electricity.

Winning New Business in China

Adient won new and replacement business with about $1 billion of annual revenue in fiscal 2024, 90% of which is with local Chinese OEMs.

Lowlights

Revenue Decline and Market Challenges

Adient's revenue declined 5% year-over-year. In Asia, sales in China underperformed the industry production primarily due to unfavorable production mix and lower customer vehicle production in EMEA.

Challenging Conditions in China

Adient's China operations faced soft demand from core customer bases and a promising new startup ceased operations. The company's China sales underperformed the overall market.

EMEA Headwinds

In EMEA, industry conditions remain challenging with strong production headwinds and program delays from economic and political uncertainty around electrification policies.

Company Guidance

During the call, Adient provided guidance for fiscal year 2025, indicating a cautious yet resilient outlook amidst various market challenges. The company reported a Q1 adjusted EBITDA of $196 million and generated $45 million in free cash flow, despite facing a 5% year-over-year revenue decline due to inventory de-stocking and production mix headwinds. Adient managed to contain decremental margins to approximately 12%, below the typical 18%. The company highlighted its strong balance sheet with $860 million in cash and a commitment to disciplined capital allocation, including $25 million in stock buybacks. Adient's management maintained their full-year adjusted EBITDA guidance near the low end of the $850 million range, despite FX headwinds and softer production volumes in China and EMEA, by leveraging improved business performance and cost efficiencies.

Adient Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy

Adient’s AGM 2025: Shareholders Approve Key Resolutions

Positive

Mar 14, 2025

On March 11, 2025, Adient held its Annual General Meeting where shareholders elected eight directors for a one-year term, ratified the appointment of PricewaterhouseCoopers LLP as the independent auditor, and approved the compensation of executive officers. Additionally, shareholders approved the adoption of an Amended Plan and renewed the Board’s authority to issue shares and opt-out of statutory preemption rights under Irish law, indicating strong support for the company’s governance and strategic initiatives.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.