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Adient's (ADNT) Deal With EnerTech to Boost Mobility Solutions

Adient ADNT recently announced a strategic partnership with EnerTech Capital, a global venture capital.

Through the collaboration, Adient will have an access to trends in the mobility space and high-tech companies that will bolster its product offerings.

EnerTech, founded in 1996, is focused on aiding entrepreneurs in building transformative technology companies. EnerTech’s global mobility network comprising the California Mobility Center will be a strength for Adient. The center has the potential to identify start-up companies that want to advance innovation in product, process and systems technologies. The opportunities will support electrification and other new mobility initiatives.

Adient has opined that the collaboration will further boost its offerings of state-of-the-art solutions for future vehicles. It will also broaden the company’s expertise and insight into EVs and promising future mobility trends. Moreover, it will enable Adient to build a network of partners with similar vision.

Being a reputed player in the automotive seating business, Adient has been gaining customers with its broad range of products in the seating business. A diverse customer base and international presence have helped the company to create a strong market position. Launch execution continues to be an intense focus for Adient and a key building block to winning new and replacement businesses. Given the customer and geographic mix, along with frequent business awards, the company’s market position is likely to strengthen, going forward.

Spurred by the strong position, its long-term debt reduced to $2.7 billion as of Jun 30, 2022, from $3.5 billion as of Sep 30, 2021. In the last reported quarter, Adient revised its fiscal 2022 projections. It envisions revenues of $14 billion, down from the prior forecast of $14.2 billion. Adjusted EBITDA forecast is in the range of $640-$660 million compared with the prior estimation of a decline of more than $100 million from the year-ago level. Expected equity income has been upwardly revised to $85 million from the prior estimation of $75 million. Capital expenditure has been brought down to the range of $250-$275 million from the prior range of $300-$325 million.

Shares of ADNT have lost 31.9% over the past year compared with its industry’s 39.6% decline.

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Zacks Rank & Key Picks

ADNT carries a Zacks Rank #3 (Hold) currently.

Some better-ranked players in the auto space are Lordstown Motors RIDE and Dorman Products DORM, each carrying a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

Lordstown has an expected earnings growth rate of 66.9% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days.

Lordstown’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. RIDE pulled off a trailing four-quarter earnings surprise of 29.35%, on average. The stock has declined 65.6% over the past year.

Dorman has an expected earnings growth rate of 10.1% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant in the past 30 days.

Dorman’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed one. DORM pulled off a trailing four-quarter earnings surprise of 0.85%, on average. The stock has declined 10.4% over the past year.

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