Q: Hi,
I’ve held Linamar for 9 years with a meagre return and dividend but recently it’s seeing some action. Considering tariffs,
EV’s, the auto industry in general what do you see for the future of Linamar.
Thanks,
Debrah
I’ve held Linamar for 9 years with a meagre return and dividend but recently it’s seeing some action. Considering tariffs,
EV’s, the auto industry in general what do you see for the future of Linamar.
Thanks,
Debrah
5i Research Answer:
LNR's products continues to be USMCA compliant, meaning the vast majority of its product crosses into the US tariff-free. The impact of tariffs are mostly in its industrial businesses. But it does have second-order effects, whereby higher input costs can mean higher product costs, which can result in lower demand for these products. Forward earnings estimates are beginning to pick up, with earnings growth around 11% expected. It trades at 8X forward earnings, and with the recent positive momentum, we think that a break into new all-time highs would be quite positive for the name here.
We think it looks OK here considering the recent momentum and earnings growth. We would be comfortable holding here.