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Adient Shares Up 4 percent Following Q3 EPS Beat

Adient (NYSE:ADNT) shares rose more than 4% on Monday following the company’s reported Q3 results, with EPS of $0.08 coming in better than the Street estimate of ($0.04).
According to the analysts at Deutsche Bank, the company’s latest guidance trim should help de-risk the 2022 outlook, and enable investors to focus on 2023 when industry volume recovery could contribute to significant EBITDA growth.
The analysts now forecast 2022 sales of $14.0 billion (down from $14.1 billion) and EBITDA of $647 million (down from $681 million), in line with management’s latest guidance range.
Looking ahead, the analysts still believe the company could recover a significant portion of the $600 million in cost inefficiencies it has identified, as industry volumes rebound and production schedules stabilize, although this could be partly offset by headwinds from FX and rising energy costs, particularly in Europe. Accordingly, the analysts reduced their 2023 sales/EBITDA estimates to $15.5 billion/$964 million (6.2% margin), from $15.8 billion/$1.002 billion (6.4% margin) previously, still representing considerable growth from 2022.
The analysts believe the company is very well positioned to benefit from industry volume rebound, reduced inefficiencies from higher capacity utilization, and its relatively successful recovery of commodities headwinds, but it certainly remains exposed to some persistent industry and macro headwinds.

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