Is Lear Corp. overvalued or undervalued?

As of 22 July 2025, Lear Corp. has moved from a very expensive to an expensive valuation grade. The company appears to be overvalued based on its current financial metrics. Key ratios include a P/E ratio of 8, an EV to EBITDA of 4.49, and a Price to Book Value of 1.11, which suggest that the stock is trading at a premium relative to its earnings and book value compared to its peers.
In comparison to its industry peers, Lear Corp. has a lower P/E ratio than Autoliv, Inc. at 18.06 and Donaldson Co., Inc. at 28.15, indicating that it is less expensive on an earnings basis. However, it is more expensive than Allison Transmission Holdings, Inc., which has a P/E of 9.98, suggesting that Lear Corp. is not the most attractive option in its sector. Additionally, the stock has underperformed against the S&P 500 over the longer term, with a 3-year return of -21.26% compared to the index's 70.41%, reinforcing the notion of overvaluation.