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1. Company Snapshot

1.a. Company Description

Linamar Corporation, together with its subsidiaries, design, develop, and produce engineered products in Canada, North America, Europe, and the Asia Pacific.It operates through two segments, Mobility and Industrial.The Mobility segment engages in the design, development, and manufacture of precision metallic components, modules, and systems for vehicle and power generation markets.


It manufactures precision-machined components and assemblies that are used in transmissions, engines, and driveline systems; driveline systems, such as power transfer units, rear-drive units, and engineered gears; and engine components, including cylinder blocks and assemblies, cylinder heads and complete head assemblies, camshaft assemblies, connecting rods, flywheels, fuel rails, and fuel body/pumps.This segment also offers transmission cases, shafts, shaft and shell assemblies, clutch modules and clutch subcomponents, valve bodies, pumps, planetary gear assemblies, and housings/covers.It serves automotive original equipment manufacturers and commercial vehicle customers.


The Industrial segment designs and produces mobile products, such as compact and rough terrain scissor lifts, vertical mast lifts, booms, and telehandlers primarily to construction equipment rental companies.This segment also offers harvesting equipment, including combine grain header attachments, self-propelled windrowers, pick-up headers, and hay products; and combine corn header attachments.Linamar Corporation has a strategic alliance with Ballard Power Systems Inc.


for the co-development and sale of fuel cell powertrains and components for class 1 and 2 vehicles in North America and Europe.Linamar Corporation was founded in 1964 and is headquartered in Guelph, Canada.

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1.b. Last Insights on LNR

Linamar Corporation's recent performance has been positively driven by growth in the automotive sector, particularly in safety components. The company's key interlock cable business benefits from rising vehicle safety standards and stricter regulations. As a major player in this market, Linamar is well-positioned to capitalize on this trend. Additionally, insiders have been increasing their holdings, signaling confidence in the company's prospects. CIBC recently adjusted its outlook on Linamar, raising its price target. The company's solid Q2 results and favorable industry trends are expected to support its growth trajectory.

1.c. Company Highlights

2. Linamar's Q3 2025 Earnings: Strong Mobility Segment Drives Growth

Linamar reported revenues of $2.5 billion for Q3 2025, a 3.6% decline from the same period last year, primarily due to a challenging industrial market. Despite this, the company's normalized net earnings were $150.1 million, or 5.9% of sales, with normalized EPS at $2.51, up 6.8% from last year. The actual EPS came out at $2.82, beating estimates of $1.97. The mobility segment saw an 88% increase in earnings, with margins growing to the top end of the normal range, driven by an increase in sales from launching programs, higher volumes on mature programs, and benefits from operational efficiencies.

Publication Date: Nov -16

📋 Highlights
  • Mobility Segment Earnings Surge:: 88% increase in earnings, reaching $165.9 million, driven by program launches, volume growth, and operational efficiencies.
  • Strategic Acquisitions:: Acquisition of Aludyne (U.S.) and GF Leipzig (Germany) adds $1 billion+ in annualized revenue with advanced casting technologies.
  • Free Cash Flow Strength:: Generated $320+ million in free cash flow, with $389.7 million from operating activities, boosting liquidity to $2.2 billion.
  • Skyjack Industrial Growth:: 46% unit volume increase in Q3 despite a 9.3% global market decline, led by scissor lift and boom market share gains.
  • Mobility Margin Expansion:: Margins rose to 8.6% in Q3 (vs. 7.5% in 2019), driven by mix improvements, cost reductions, and volume gains.

Segment Performance

The mobility segment's strong performance was a key driver of Linamar's growth, with sales increasing by $127.6 million or 7.1% over last year to $1.9 billion. The industrial segment, however, faced challenges, with sales and normalized operating earnings expected to decline in 2025. The company's agricultural business is also experiencing a downturn, but management noted that cycles are typically down for two to three years.

Acquisitions and Growth Opportunities

Linamar announced two significant acquisitions: Aludyne aluminum casting technologies in the U.S. and the GF Leipzig ductile iron casting facility in Germany, representing over $1 billion in sales. These acquisitions will contribute to Linamar's normal operating earnings range and support growth in the mobility segment. The company secured $457 million in new business wins, with $195 million in body and chassis components.

Valuation and Outlook

Linamar's valuation metrics indicate a relatively attractive price. The company's P/E Ratio is 22.48, EV/EBITDA is 3.9, and Free Cash Flow Yield is 17.7%. Analysts estimate next year's revenue growth at 11.2%. With a strong balance sheet and robust free cash flow generation, Linamar is well-positioned to pursue growth opportunities. The company's guidance for 2025 remains largely unchanged, with expected sales growth and double-digit normalized operating earnings growth in the Mobility segment.

Management's Strategy and Investor Appeal

Linda Hasenfratz highlighted Linamar's key messages, including being entrepreneurial and opportunistic, securing over $1 billion in revenue growth for 2026, and generating exceptional free cash flow. The company is pursuing various growth opportunities, including industrial and mobility businesses. Management's focus on operational excellence, cost reduction, and favorable product mix has driven margin expansion in the Mobility segment.

3. NewsRoom

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Should You Investigate Linamar Corporation (TSE:LNR) At CA$78.79?

Dec -02

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Read This Before Considering Linamar Corporation (TSE:LNR) For Its Upcoming CA$0.29 Dividend

Nov -16

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Linamar Completes Acquisition of Aludyne North America Assets

Nov -15

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Linamar (TSX:LNR) Posts Higher Profits Amid Buybacks—Do Earnings Quality or Growth Prospects Stand Out?

Nov -14

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Is There An Opportunity With Linamar Corporation's (TSE:LNR) 47% Undervaluation?

Nov -14

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Linamar Corp (LIMAF) Q3 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...

Nov -13

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Linamar Q3 Normalized Earnings Beat Expectations

Nov -12

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Strong Growth in Mobility, Outstanding Free Cash Flow, and NCIB Renewal Marks a Solid Q3 for Linamar

Nov -12

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.54%)

6. Segments

Mobility

Expected Growth: 6%

Linamar's Mobility segment growth is driven by increasing demand for electric vehicles, rising adoption of autonomous driving technologies, and growing need for lightweighting and electrification solutions. Additionally, the company's strategic acquisitions and partnerships, such as its collaboration with Ballard Power Systems, have expanded its product offerings and strengthened its market position.

Industrial

Expected Growth: 8%

Linamar Corporation's Industrial segment growth is driven by increasing demand for electrification and autonomous technologies in the automotive industry, coupled with the company's strategic acquisitions and expansion into emerging markets. Additionally, the segment benefits from the trend towards light-weighting and fuel efficiency, as well as the growing need for advanced manufacturing technologies.

7. Detailed Products

Light Vehicle Driveline Components

Linamar Corporation designs and manufactures driveline components for light vehicles, including axles, gears, and assemblies.

Commercial Vehicle Driveline Components

Linamar Corporation designs and manufactures driveline components for commercial vehicles, including axles, gears, and assemblies.

Aerial Work Platforms

Linamar Corporation designs and manufactures aerial work platforms, including boom lifts, scissor lifts, and telehandlers.

Skid-Steer Loaders

Linamar Corporation designs and manufactures skid-steer loaders, including compact track loaders and multi-terrain loaders.

Agricultural Harvesting Equipment

Linamar Corporation designs and manufactures agricultural harvesting equipment, including combine harvesters and forage harvesters.

Industrial Assembly and Automation

Linamar Corporation provides industrial assembly and automation services, including robotic welding and material handling solutions.

8. Linamar Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Linamar Corporation is medium due to the presence of alternative products and services in the market. However, the company's strong brand reputation and customer loyalty mitigate this threat to some extent.

Bargaining Power Of Customers

The bargaining power of customers is low for Linamar Corporation due to the company's strong market position and the lack of concentration among its customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Linamar Corporation due to the presence of a few large suppliers in the market. However, the company's long-term contracts and strategic partnerships mitigate this threat to some extent.

Threat Of New Entrants

The threat of new entrants is low for Linamar Corporation due to the high barriers to entry in the industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for Linamar Corporation due to the presence of several established players in the market, leading to intense competition and pricing pressure.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.16%
Debt Cost 5.48%
Equity Weight 76.84%
Equity Cost 11.33%
WACC 9.97%
Leverage 30.14%

11. Quality Control: Linamar Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Magna

A-Score: 6.2/10

Value: 8.1

Growth: 4.0

Quality: 4.3

Yield: 7.0

Momentum: 6.5

Volatility: 7.0

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Linamar

A-Score: 5.7/10

Value: 7.7

Growth: 5.2

Quality: 4.6

Yield: 2.0

Momentum: 6.5

Volatility: 8.3

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Lear

A-Score: 5.6/10

Value: 7.9

Growth: 5.1

Quality: 4.1

Yield: 5.0

Momentum: 4.0

Volatility: 7.3

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Dorman Products

A-Score: 5.6/10

Value: 3.7

Growth: 8.0

Quality: 6.5

Yield: 0.0

Momentum: 8.5

Volatility: 6.7

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LKQ

A-Score: 5.4/10

Value: 7.4

Growth: 5.4

Quality: 4.9

Yield: 6.0

Momentum: 2.0

Volatility: 7.0

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Gentex

A-Score: 5.4/10

Value: 7.3

Growth: 5.6

Quality: 5.4

Yield: 3.0

Momentum: 4.0

Volatility: 7.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

77.29$

Current Price

77.29$

Potential

-0.00%

Expected Cash-Flows