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1. Company Snapshot

1.a. Company Description

Garrett Motion Inc., together with its subsidiaries, designs, manufactures, and sells turbocharger and electric-boosting technologies for light and commercial vehicle original equipment manufacturers worldwide.The company offers light vehicle gasoline and diesel, and commercial vehicle turbochargers; and provides automotive software solutions.It offers its products in the aftermarket through distributors.


Garrett Motion Inc.was incorporated in 2018 and is headquartered in Rolle, Switzerland.

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1.b. Last Insights on GTX

Positive drivers behind Garrett Motion's recent performance include its strong Q4 earnings and revenue beat, with adjusted earnings per share of $0.47, surpassing estimates. The company's introduction of a long-term capital allocation framework aimed at returning at least 75% of its Adjusted Free Cash Flow to shareholders over time, including dividend payments and share buybacks, is also a significant positive. Additionally, Garrett Motion's strong 2024 financial performance, with net sales totaling $3,475 million and adjusted EBITDA margin of 17.2%, demonstrates the company's ability to execute and drive growth. Its recent rating upgrade to "Buy" further reinforces the optimistic outlook on the company's earnings prospects.

1.c. Company Highlights

2. Garrett Motion's Q3 2025 Earnings: A Strong Performance

Garrett Motion reported net sales of $902 million for the third quarter of 2025, representing a 6% increase at constant currency. The company's adjusted EBIT margin was 14.7%, with an adjusted EBIT of $133 million. The actual EPS came out at $0.38, beating estimates of $0.33. Adjusted free cash flow was $107 million for the quarter, demonstrating the company's ability to generate strong cash flow. The company's financial performance was driven by increased sales in a more stable production environment and disciplined operational execution.

Publication Date: Oct -28

📋 Highlights
  • Q3 Net Sales Growth:: Achieved $902 million in net sales, a 6% increase at constant currency, driven by stable production and operational discipline.
  • Adjusted EBIT Margin:: Delivered $133 million in adjusted EBIT with a 14.7% margin, despite 20 basis points of dilution from tariff recoveries.
  • 2025 Outlook Raised:: Midpoint net sales guidance increased to $3.55 billion (flat to +1% at constant currency), with adjusted EBIT targeting $510 million.
  • Shareholder Returns:: Repurchased $84 million in shares and raised quarterly dividend to $0.08 per share, a 33% increase, reflecting strong cash flow generation.

Revenue Growth and Margin Expansion

The company's revenue growth was driven by a recovery in diesel, mainly in Europe and North America, as well as significant growth in the industrial sector, particularly in data centers. The industrial business is expected to continue growing, with revenue from stationary power applications expected to exceed $100 million in 2025. The company's E-Cooling technology is expected to be a key differentiator in the market, offering improved efficiency, weight, and noise reduction.

Zero-Emission Products and Capital Allocation

Garrett made progress in developing its zero-emission products, securing additional proof of concepts with OEMs in Japan and China for its high-speed 3-in-1 E-Powertrain. The company remains committed to returning 75% or more of cash generated to shareholders through dividends, buybacks, and debt repayment. The company accelerated its share repurchase activity, buying back $84 million of common stock, and paid a $12 million quarterly dividend, with the Board of Directors approving a 33% increase in the dividend.

Valuation and Outlook

With a P/E Ratio of 10.39 and an EV/EBITDA of 23.63, the company's valuation appears reasonable, considering its growth prospects. Analysts estimate next year's revenue growth at 2.2%. The company's raised 2025 outlook midpoint implies net sales of $3.55 billion, flat to plus 1% at constant currency, and adjusted EBIT of $510 million. The margin profile for the company's zero-emission products is expected to be similar to or accretive to its turbocharger business, providing a positive outlook for future growth.

3. NewsRoom

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Garrett Motion Announces $250 Million Share Repurchase Program for 2026

Dec -03

Source: globenewswire.com

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Take the Zacks Approach to Beat the Markets: MBX Biosciences, Garrett Motion & Monster Beverage in Focus

Dec -01

Source: zacks.com

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Traders Buy High Volume of Garrett Motion Call Options (NYSE:GTX)

Nov -29

Source: defenseworld.net

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Envestnet Asset Management Inc. Sells 6,758 Shares of Garrett Motion Inc. $GTX

Nov -26

Source: defenseworld.net

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Howard Marks Exits Sitio Royalties Corp, Impacting Portfolio by -5.04%

Nov -14

Source: gurufocus.com

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Are Auto-Tires-Trucks Stocks Lagging GARRETT MOTION (GTX) This Year?

Nov -14

Source: zacks.com

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Top-Rated Low-Beta Stocks: Bet on USAC, FUTU & GTX Right Away

Nov -11

Source: zacks.com

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Garrett Motion Announces Participation at Baird Global Industrial Conference

Nov -05

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.81%)

6. Segments

Gas

Expected Growth: 2.5%

Garrett Motion Inc.'s 2.5% growth in Gas segment is driven by increasing adoption of turbochargers in commercial vehicles, rising demand for fuel-efficient engines, and growing penetration in emerging markets. Additionally, the company's focus on electrification and hybridization of powertrains is expected to contribute to growth.

Diesel

Expected Growth: 2.8%

Garrett Motion Inc.'s diesel segment growth of 2.8% is driven by increasing demand for fuel-efficient technologies, stringent emission regulations, and rising adoption of diesel engines in emerging markets. Additionally, the company's focus on innovation, cost reduction, and strategic partnerships contribute to its growth momentum.

Commercial Vehicle

Expected Growth: 3.2%

Garrett Motion Inc.'s Commercial Vehicle segment growth of 3.2% is driven by increasing demand for heavy-duty trucks, rising adoption of emission-reducing technologies, and growing aftermarket sales. Additionally, the company's focus on electrification and hybridization of commercial vehicles, as well as its expansion into emerging markets, contribute to its growth momentum.

Aftermarket

Expected Growth: 3.5%

Garrett Motion Inc.'s aftermarket growth of 3.5% is driven by increasing vehicle parc, rising average vehicle age, and growing demand for replacement parts. Additionally, the company's focus on electrification, connectivity, and autonomous technologies is expected to drive growth in the aftermarket segment.

Other

Expected Growth: 2.2%

Garrett Motion Inc.'s 'Other' segment growth of 2.2% is driven by increasing demand for electrification solutions, expansion in emerging markets, and strategic partnerships. Additionally, the company's focus on innovation and R&D investments in areas like advanced materials and software solutions also contribute to this growth.

7. Detailed Products

Turbochargers

Garrett Motion Inc. offers a wide range of turbochargers for passenger vehicles, commercial vehicles, and industrial applications, providing improved fuel efficiency, increased power density, and reduced emissions.

Electric Turbochargers

Garrett Motion Inc.'s electric turbochargers use an electric motor to drive the turbocharger, providing faster transient response, improved low-end torque, and reduced emissions.

Hybrid Turbochargers

Garrett Motion Inc.'s hybrid turbochargers combine a traditional turbocharger with an electric motor, providing improved performance, reduced emissions, and increased fuel efficiency.

Variable Nozzle Turbine (VNT) Turbochargers

Garrett Motion Inc.'s VNT turbochargers use a variable nozzle to optimize turbine performance, providing improved low-end torque, faster transient response, and reduced emissions.

Wastegate Turbochargers

Garrett Motion Inc.'s wastegate turbochargers use a wastegate valve to bypass excess exhaust gas, providing improved performance, reduced emissions, and increased fuel efficiency.

Turbocharger Accessories

Garrett Motion Inc. offers a range of turbocharger accessories, including actuators, sensors, and controllers, to optimize turbocharger performance and reliability.

Connected Vehicle Solutions

Garrett Motion Inc.'s connected vehicle solutions provide real-time data and analytics to optimize vehicle performance, reduce emissions, and improve fuel efficiency.

Autonomous Vehicle Solutions

Garrett Motion Inc.'s autonomous vehicle solutions provide advanced sensing and computing technologies to enable autonomous driving capabilities.

8. Garrett Motion Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Garrett Motion Inc. faces moderate threat from substitutes, as customers have limited alternatives for its turbocharger and electric-boosting technologies.

Bargaining Power Of Customers

Garrett Motion Inc. has a diverse customer base, which reduces the bargaining power of individual customers, and the company's products are often customized, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

Garrett Motion Inc. relies on a few key suppliers for critical components, which gives them some bargaining power, but the company's large scale and diversified supply chain mitigate this risk.

Threat Of New Entrants

The turbocharger and electric-boosting technologies markets have high barriers to entry, including significant capital requirements, technological expertise, and established customer relationships, making it difficult for new entrants to compete with Garrett Motion Inc.

Intensity Of Rivalry

The turbocharger and electric-boosting technologies markets are highly competitive, with several established players, including BorgWarner and Continental AG, which creates a high level of rivalry and competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 176.80%
Debt Cost 10.30%
Equity Weight -76.80%
Equity Cost 10.30%
WACC 10.30%
Leverage -230.20%

11. Quality Control: Garrett Motion Inc. passed 2 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
Kendrion

A-Score: 5.4/10

Value: 7.9

Growth: 1.6

Quality: 3.6

Yield: 6.2

Momentum: 8.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Akwel

A-Score: 5.2/10

Value: 9.0

Growth: 3.1

Quality: 4.4

Yield: 6.2

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Plastic Omnium

A-Score: 4.8/10

Value: 8.4

Growth: 4.3

Quality: 2.6

Yield: 6.9

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
ElringKlinger

A-Score: 4.6/10

Value: 10.0

Growth: 1.9

Quality: 3.0

Yield: 3.8

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Garrett Motion

A-Score: 4.5/10

Value: 7.1

Growth: 1.8

Quality: 5.8

Yield: 0.6

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Nokian Renkaat

A-Score: 4.4/10

Value: 8.1

Growth: 1.0

Quality: 2.6

Yield: 8.1

Momentum: 3.0

Volatility: 3.7

1-Year Total Return ->

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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

16.57$

Current Price

16.57$

Potential

-0.00%

Expected Cash-Flows