Core Insights - The year 2025 began with strong optimism for stock prices, but this was quickly challenged by low-cost AI initiatives from China, tariff issues, high inflation, and elevated interest rates [1] - Investor sentiment improved midyear as trade tensions eased and the Federal Reserve cut interest rates three times, but a U.S. government shutdown and concerns over AI sector valuations dampened enthusiasm [2] Investment Opportunities - Despite market volatility, investing in stocks remains viable; following broker recommendations and maintaining a watchlist of broker-favorite stocks can be beneficial [3][4] - A screening strategy was developed to identify stocks with improving broker recommendations and upward earnings estimate revisions, utilizing the price/sales ratio as a complementary valuation metric [5][6] Stock Highlights - Bunge Global SA (BG) is undergoing a strategic overhaul with the Viterra merger to enhance global scale and long-term returns; it has surpassed earnings estimates in three of the last four quarters with an average beat of 11.75% [8][9] - Air Canada (ACDVF) has seen a 98.9% increase in earnings estimates for 2026 due to strong travel demand and lower fuel costs, surpassing earnings estimates in two of the last four quarters [9][10] - Adient (ADNT), a major automotive seating supplier, has a strong market position with a 23.62% average earnings beat over the last four quarters [11] - Arrow Electronics (ARW) has a projected EPS growth rate of 10.7% over the next 3-5 years and has consistently surpassed earnings estimates, with an average beat of 14.6% [12][13] - ChargePoint Holdings (CHPT) is a leader in EV charging, recently launching a next-gen software platform; its earnings estimates for fiscal 2026 and 2027 suggest year-over-year improvements of 32.4% and 35.8%, respectively [14][15]

Core Insights - The year 2025 has experienced significant volatility in equity markets due to tariff issues, inflation, softening job growth, and geopolitical tensions [1] - Despite market uncertainties, investors are encouraged to consider stocks with strong broker recommendations and improving earnings estimates [2][7] Stock Recommendations - Recommended stocks include Zumiez (ZUMZ), The Beachbody Company (BODI), CVR Energy (CVI), Civitas Resources (CIVI), and Adient (ADNT), all of which have shown strong earnings estimate revisions and favorable broker recommendations [2][7] - Zumiez is a specialty retailer focusing on apparel and accessories, with a strong performance driven by North American markets [6][7] - The Beachbody Company offers a vast digital fitness library and has consistently surpassed earnings estimates, showcasing a strong digital model [8][9] - CVR Energy is involved in renewable energy and petroleum refining, with a commitment to reducing carbon emissions [10][11] - Civitas Resources benefits from a strong presence in productive U.S. shale plays, enhancing its market position [11][12] - Adient has a diverse customer base and international presence, contributing to its growth potential [12][13] Screening Strategy - A screening strategy was developed to identify stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks [4] - Key parameters include net upgrades in broker ratings, percentage change in earnings estimates, price-to-sales ratio, stock price above $5, average daily volume over 100,000 shares, and market capitalization in the top 3000 [5][6]

Core Viewpoint - Adient's recent earnings report shows a mixed performance, with adjusted EPS falling short of expectations while net sales exceeded estimates, raising questions about future performance leading up to the next earnings release [1][2]. Financial Performance - Adient reported adjusted EPS of 52 cents for Q4 fiscal 2025, down from 68 cents in the same period last year and below the Zacks Consensus Estimate of 55 cents [2]. - The company generated net sales of $3.69 billion, a 3.5% year-over-year increase, surpassing the Zacks Consensus Estimate of $3.63 billion [2]. Segmental Performance - The Americas segment recorded revenues of $1.79 billion, a 3.9% increase year-over-year, exceeding the Zacks Consensus Estimate of $1.76 billion, but adjusted EBITDA fell to $111 million from $116 million due to unfavorable net commodity costs [4]. - The EMEA segment achieved revenues of $1.15 billion, also up 3.9% year-over-year, surpassing the Zacks Consensus Estimate of $1.1 billion, with adjusted EBITDA rising to $31 million from $28 million [5]. - The Asia segment reported revenues of $783 million, up from $765 million in the previous year, exceeding the Zacks Consensus Estimate of $771 million, but adjusted EBITDA decreased to $106 million from $112 million due to lower equity income and unfavorable volume/mix [6]. Financial Position - As of September 30, 2025, Adient had cash and cash equivalents of $958 million, an increase from $945 million a year earlier, while long-term debt stood at $2.39 billion [7]. - Capital expenditures totaled $79 million, up from $72 million in the prior-year quarter [7]. Guidance for FY26 - Adient projects fiscal 2026 revenues to be $14.4 billion, a decrease from $14.54 billion in fiscal 2025, with adjusted EBITDA estimated at $845 million, down from $881 million [8]. - Free cash flow is anticipated to be $90 million, with capital expenditures estimated at $300 million [8]. Estimate Trends - Estimates for Adient have trended downward over the past month, with a significant shift of -58.02% in consensus estimates [9][10]. VGM Scores - Adient currently holds a Growth Score of B, a Momentum Score of D, and a Value Score of A, resulting in an aggregate VGM Score of A, indicating strong value potential [11]. Industry Performance - Adient operates within the Zacks Automotive - Original Equipment industry, where competitor Cooper-Standard has seen a 4.6% gain over the past month, despite reporting a loss of $0.24 per share compared to a loss of $0.68 a year ago [13].

Company Operations and Workforce - Adient operates approximately 200 manufacturing, assembly, or sequencing facilities across 29 countries, employing over 65,000 people[12][14]. - Adient's global workforce consists of approximately 65,000 employees, with 41% identifying as female and 54% of U.S. employees as ethnic minorities[51]. - 99% of Adient's salaried workforce completed the annual Ethics Policy certification in fiscal year 2025[49]. - 98% of Adient's facilities are third-party audited and certified for health and safety management systems[52]. Technology and Innovation - Adient's investment in technology includes automation and artificial intelligence to reduce labor costs and improve accuracy[17]. - The company has developed a comprehensive energy management toolkit to help reduce energy use and related emissions[47]. - Adient is likely to pursue new product development and technological advancements, as indicated by the diverse backgrounds of its executives in manufacturing and operations[61]. Market Position and Strategy - The company focuses on long-term relationships with leading global OEMs, enhancing its ability to grow alongside them[13][18]. - Adient aims to expand its market share in seating and seating components, leveraging its strong relationships with global OEM customers[26]. - Adient's strong market position in China includes 37 manufacturing locations in 22 cities, supported by partnerships with major auto groups[24]. - The competitive landscape includes traditional seating suppliers and component specialists, with Adient's vertical integration providing a competitive edge[35]. Sustainability and Environmental Goals - Adient aims to reduce its scope 1 and 2 greenhouse gas emissions by 75% by 2030, using 2019 as the base year[45]. - The company aspires to achieve carbon neutrality at its manufacturing sites for scope 1 and 2 emissions by 2040[45]. - Adient has set a goal to source 100% of the electricity consumed at its manufacturing sites from renewable sources by 2035[46]. - Adient is working to reduce scope 3 emissions by 35% by 2030, with 2019 as the base year[48]. - The Pure Ergonomics seat developed by Adient achieves a 5% reduction in weight and contains 46% recycled content compared to conventional models[48]. Operational Efficiency and Management - The company focuses on operational efficiencies through standardized manufacturing processes, optimizing inventory, and reducing costs[15]. - Adient's Core Product Portfolio strategy aims to sustain market success by leveraging modular and scalable systems[21]. - Adient's health and safety management system is certified to the ISO 45001 standard, with 100% of facilities internally audited for compliance[52]. - The company has implemented a five-year global water management strategy to reduce water consumption and enhance operational resilience[47]. Leadership and Governance - Adient's leadership team includes experienced executives with backgrounds in operations, finance, and legal, enhancing the company's strategic direction[61][62][67]. - The company's commitment to continuous improvement and best practices is reflected in its executive roles, which may enhance operational efficiency[61]. - Adient's strategic focus on legal and human resources management suggests an emphasis on compliance and workforce development[67]. - The leadership team has a combined experience in major automotive companies, which may provide competitive advantages in market positioning and operational excellence[62][65].

Core Insights - Adient (ADNT) reported adjusted earnings per share (EPS) of 52 cents for Q4 fiscal 2025, down from 68 cents in the previous year and below the Zacks Consensus Estimate of 55 cents [1][9] - The company generated net sales of $3.69 billion, a 3.5% year-over-year increase, surpassing the Zacks Consensus Estimate of $3.63 billion [1][9] Segment Performance - The Americas segment recorded revenues of $1.79 billion, a 3.9% increase year-over-year, exceeding the Zacks Consensus Estimate of $1.76 billion. Adjusted EBITDA for this segment was $111 million, down from $116 million in the prior year, missing the consensus estimate [3] - The EMEA segment achieved revenues of $1.15 billion, up 3.9% year-over-year, and also exceeded the Zacks Consensus Estimate of $1.1 billion. Adjusted EBITDA rose to $31 million from $28 million in the previous year, surpassing the consensus estimate [4] - The Asia segment reported revenues of $783 million, an increase from $765 million in the same quarter last year, beating the Zacks Consensus Estimate of $771 million. Adjusted EBITDA fell to $106 million from $112 million in the prior year, missing the consensus estimate [5] Financial Position - As of September 30, 2025, Adient had cash and cash equivalents of $958 million, up from $945 million a year earlier. Long-term debt stood at $2.39 billion, with capital expenditures totaling $79 million compared to $72 million in the prior-year quarter [6] Guidance for FY26 - Adient anticipates fiscal 2026 revenues of $14.4 billion, a decrease from $14.54 billion in fiscal 2025. Adjusted EBITDA is projected to be $845 million, down from $881 million in fiscal 2025, with equity income expected to be $70 million and free cash flow anticipated at $90 million [7][9] Zacks Rank - Adient currently holds a Zacks Rank 3 (Hold) [8]

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Core Insights - Adient reported $3.69 billion in revenue for the quarter ended September 2025, a year-over-year increase of 3.5% [1] - The EPS for the same period was $0.52, down from $0.68 a year ago, indicating a decline [1] - Revenue exceeded the Zacks Consensus Estimate of $3.63 billion by 1.55%, while EPS fell short of the consensus estimate of $0.55 by 5.45% [1] Revenue Breakdown - Net Sales in the Americas reached $1.79 billion, surpassing the average estimate of $1.76 billion, reflecting a year-over-year increase of 3.9% [4] - Net Sales in Asia amounted to $783 million, exceeding the average estimate of $771.25 million, with a year-over-year change of 2.4% [4] - Net Sales in EMEA were reported at $1.15 billion, above the average estimate of $1.1 billion, showing a year-over-year increase of 3.8% [4] - Net Sales for Eliminations were reported at -$26 million, compared to the average estimate of -$19.94 million, representing a year-over-year change of 4% [4] Stock Performance - Adient's shares have returned -1.2% over the past month, contrasting with the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported Q4 sales of $3.7 billion, a 4% increase compared to fiscal year 2024, with adjusted EBITDA of $226 million and an adjusted EBITDA margin of 6.1% [21][22] - Full year sales totaled approximately $14.5 billion, down 1% year over year, while adjusted EBITDA remained flat at $881 million [23][24] - Free cash flow for the year was $204 million, exceeding the high end of guidance, with $125 million returned to shareholders through share buybacks [4][5][31] Business Line Data and Key Metrics Changes - The Americas saw a margin expansion of 40 basis points for the full year, driven by lower launch costs and commercial actions despite a $17 million net tariff impact [28] - EMEA results were negatively impacted by a $36 million headwind from volume mix due to lower customer production volumes, although positive business performance of $17 million was noted [29] - In Asia, business performance contributed a $34 million tailwind, offsetting a $33 million volume mix headwind due to lower sales in China [29] Market Data and Key Metrics Changes - Sales in China trailed the market due to production declines from traditional premium OEM customers, while the rest of Asia outperformed due to prior customer launches ramping to full production [25] - The company expects to achieve double-digit growth over market in China and mid-single-digit growth in North America by 2027 [13][70] Company Strategy and Development Direction - The company is focusing on automation and AI integration to enhance operational efficiency and drive long-term growth [9][14] - A new strategic partnership in China aims to deepen engagement with leading OEMs and strengthen competitive positioning [13] - The company is committed to driving sustainable value through innovation and operational excellence, with a focus on winning new business and improving customer collaboration [12][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from customer volume reductions and dynamic tariff policies but emphasized strong business execution and cash generation [4][5] - The outlook for fiscal year 2026 includes anticipated revenue declines in North America and Europe, partially offset by growth in China [34][39] - Management remains optimistic about future growth, particularly in China, and is focused on mitigating risks associated with tariffs and geopolitical factors [18][39] Other Important Information - The company has a strong liquidity position with $1.8 billion in total liquidity, including $958 million in cash and $814 million in undrawn credit [32][33] - The company plans to continue share repurchases and manage capital allocation prudently, with $135 million remaining in the share repurchase authorization [43] Q&A Session Summary Question: Can you provide insights on the 1% forecast underperformance versus S&P? - Management indicated that the underperformance is primarily due to F-150 downtime and the wind down of unprofitable business in Europe, which together account for the 1% drag [46][48] Question: What factors contribute to the high decremental volume mix? - The high decremental is attributed to unexpected F-150 downtime and Nexperia chip shortages, which have significantly impacted production and margins [51][52] Question: Can you elaborate on the $85 million investment for future growth? - The investment is essential for driving growth, with a focus on automation and AI, expected to yield significant savings over time [61][62] Question: What is the line of sight for growth over market in 2027? - Management expressed confidence in growth driven by customer launches in China and improved execution from Japanese OEMs in North America [70][71] Question: What are the expectations for revenue margins in Q1 2026? - Management anticipates a potential decline in EBITDA of $15 million to $20 million year on year due to production disruptions [84][86]

Core Viewpoint - Adient reported quarterly earnings of $0.52 per share, missing the Zacks Consensus Estimate of $0.55 per share, and down from $0.68 per share a year ago, indicating a -5.45% earnings surprise [1] Financial Performance - Adient's revenues for the quarter ended September 2025 were $3.69 billion, surpassing the Zacks Consensus Estimate by 1.55%, and up from $3.56 billion year-over-year [2] - Over the last four quarters, the company has exceeded consensus revenue estimates four times [2] Stock Performance - Adient shares have increased approximately 39.2% since the beginning of the year, outperforming the S&P 500's gain of 15.1% [3] Future Outlook - The company's earnings outlook will be crucial for determining the sustainability of its stock price movement, with current consensus EPS estimates at $0.40 for the coming quarter and $2.25 for the current fiscal year [4][7] - The Zacks Rank for Adient is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Automotive - Original Equipment industry, to which Adient belongs, is currently in the top 41% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Financial Performance - FY25 - Consolidated revenue reached approximately $14.5 billion, a decrease of 1% year-over-year[12] - Adjusted EBITDA remained flat year-over-year at $881 million[12] - Free cash flow was reported at $204 million[12] - The company repurchased approximately 7% of its shares outstanding, amounting to $125 million in capital return[12] Q4 FY25 Highlights - Consolidated sales increased by 4% year-over-year, reaching $3.7 billion[13] - Adjusted EBITDA for Q4 FY25 was $226 million, with a margin of 6.1%[13] - Strong free cash flow generation of $134 million was achieved during the quarter[13] FY26 Outlook - Sales are projected to be approximately $14.4 billion due to lower expected production volumes[88] - Adjusted EBITDA is expected to be around $845 million, influenced by business performance offsetting volume headwinds[88] - Free cash flow is forecasted at approximately $90 million, impacted by timing shifts and increased growth spending[88] Regional Sales Performance (Q4 FY25) - Americas sales outperformed the market by 100 bps due to favorable volume/mix[51] - EMEA sales underperformed the market by 400 bps mainly due to customer mix[51]