Garrett Motion Inc. Common Stock
GTX
$27.97
+2.34%
Garrett Motion Inc. designs, manufactures, and sells engineered turbocharger and electric-boosting technologies for light and commercial vehicle OEMs, operating in the auto parts industry. As a technology leader, Garrett is distinct for its expertise across gasoline, diesel, natural gas, and electrified powertrains, with a strong aftermarket presence. The current investor narrative centers on the company's robust financial performance amid a cautious 2026 automotive production outlook, as highlighted by recent news of solid Q4 results being overshadowed by guidance concerns. Additionally, the stock's significant price appreciation over the past year reflects growing confidence in its electrification strategy and margin expansion, though near-term volatility persists due to sector headwinds.…
GTX
Garrett Motion Inc. Common Stock
$27.97
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Investment Opinion: Should I buy GTX Today?
Based on the analysis, GTX is rated a Buy. The consensus recommendation is 'buy' with an average target price of $37.17, implying a 32.9% upside. The thesis is supported by strong profitability, a low PEG ratio of 0.51, and robust free cash flow generation, which positions the company for growth despite near-term headwinds.
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GTX 12-Month Price Forecast
The AI assessment is bullish on GTX, driven by its attractive valuation, solid profitability, and positive analyst sentiment. The company's strong cash flow and margin performance provide a foundation for growth, despite near-term production headwinds. However, the medium confidence reflects uncertainties in the automotive cycle and the company's leveraged balance sheet. If GTX can maintain its margins and navigate the cautious production environment, the stock is likely to appreciate toward analyst targets. Key developments to watch include quarterly earnings, production guidance, and debt reduction progress; any positive surprises could upgrade the stance to high confidence, while negative surprises would warrant a downgrade.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Garrett Motion Inc. Common Stock's 12-month outlook, with a consensus price target around $37.17 and implied upside of +32.9% versus the current price.
Average Target
$37.17
0 analysts
Implied Upside
+32.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$34 - $42
Analyst target range
Analyst coverage includes 6 analysts, with a consensus recommendation of 'buy' and a mean rating of 1.83 (where 1 is strong buy and 5 is sell). The average target price is $37.17, implying a 32.9% upside from the current price of $27.97. The target range spans from $34.00 low to $42.00 high, with the high target suggesting a 50.2% upside, reflecting optimism about the company's electrification strategy and margin expansion. The low target still implies a 21.6% upside, indicating that even the most bearish analyst sees value. The relatively narrow spread between low and high targets (23.5% of the average) suggests moderate conviction, though the absence of recent ratings changes limits insight into momentum. Overall, the bullish consensus is supported by strong fundamentals and a discounted valuation.
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Bulls vs Bears: GTX Investment Factors
Garrett Motion presents a compelling bull case with strong price momentum, undervaluation on earnings and growth metrics, solid margins, and a bullish analyst consensus. However, bearish concerns revolve around a cautious 2026 production outlook, a leveraged balance sheet, and recent volatility. Currently, the bull case has stronger evidence, supported by a 32.9% upside to analyst targets and a PEG of 0.51, but the primary tension lies in whether the company can sustain its growth trajectory amid a weak automotive production environment. If production forecasts improve, the stock could re-rate higher; conversely, a prolonged downturn could expose its financial leverage and lead to significant downside.
Bullish
- Strong 1-Year Price Appreciation: GTX has surged 112.2% over the past year, vastly outperforming the S&P 500's 18.7% gain. This demonstrates robust market confidence in the company's strategic direction and operational execution.
- Undervalued on PEG and PE: With a trailing PE of 11.25x and a PEG ratio of 0.51, the stock trades at a significant discount to its growth prospects. This suggests the market is pricing in limited future growth, presenting a potential value opportunity.
- Solid Profitability Margins: Gross margin stands at 24.5% and operating margin at 13.8%, indicating efficient cost management and pricing power. Net margin of 8.65% further underscores the company's ability to convert revenue into profit.
- Analyst Consensus Buy with Upside: Six analysts rate GTX a 'buy' with an average target price of $37.17, implying a 32.9% upside from the current price of $27.97. Even the lowest target of $34.00 suggests a 21.6% upside, reflecting broad optimism.
Bearish
- Cautious 2026 Production Outlook: Recent news highlights that solid Q4 results were overshadowed by cautious FY26 automotive production guidance, causing a sharp premarket decline. This suggests near-term demand headwinds could pressure revenue growth.
- Negative Return on Equity: ROE is -38.65%, reflecting a leveraged balance sheet with negative equity (debt-to-equity of -1.88). This financial structure poses risks, especially if earnings decline or interest rates rise.
- Recent Price Volatility and Drawdown: The stock has experienced a -28.68% max drawdown and a -10.95% decline over the past month. Such volatility indicates investor uncertainty and potential for further downside if market sentiment shifts.
- High Valuation Relative to Cash Flow: While PE is low, the price-to-cash-flow ratio of 8.43 is not exceptionally cheap, and the EV/EBITDA of 8.07 suggests the market is paying a fair premium for the company's earnings power. This limits margin of safety.
GTX Technical Analysis
Garrett Motion's stock has exhibited a powerful long-term uptrend, with a 1-year price change of +112.2%, significantly outperforming the S&P 500's +18.7% over the same period. The current price of $27.97 sits at 77.3% of the 52-week range (between $12.26 low and $36.25 high), indicating the stock is trading closer to its highs but has pulled back from the peak. This positioning suggests the stock remains in a bullish phase, though the recent retreat from the highs may signal profit-taking or consolidation after a strong run.
Beta
0.80
0.80x market volatility
Max Drawdown
-28.7%
Largest decline past year
52-Week Range
$12-$36
Price range past year
Annual Return
+112.2%
Cumulative gain past year
| Period | GTX Return | S&P 500 |
|---|---|---|
| 1m | -11.0% | -0.4% |
| 3m | -12.5% | +4.5% |
| 6m | +51.5% | +13.9% |
| 1y | +112.2% | +19.0% |
| ytd | +60.9% | +12.9% |
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GTX Fundamental Analysis
Garrett Motion's revenue trajectory shows resilience, with the latest quarterly revenue estimated at $4.158 billion (annualized), reflecting a stable demand environment despite cautious automotive production forecasts. The company's gross margin stands at 24.5%, while operating margin is 13.8%, indicating solid profitability relative to industry peers. Net income is positive, with an EPS of $0.089, and the net margin of 8.65% underscores efficient cost management. However, the negative ROE of -38.65% and debt-to-equity of -1.88 suggest a leveraged balance sheet, though the current ratio of 0.97 indicates near-term liquidity is adequate. Free cash flow generation appears robust, as evidenced by a price-to-cash-flow ratio of 8.43, supporting internal funding for growth initiatives.
Quarterly Revenue
N/A
N/A
Revenue YoY Growth
N/A
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
N/A
Last 12 Months
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Valuation Analysis: Is GTX Overvalued?
Given Garrett Motion's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 11.25x, while the forward PE is 12.17x, indicating that the market expects slightly lower earnings growth in the near term. The PEG ratio of 0.51 suggests the stock is undervalued relative to its growth prospects, implying a favorable risk-reward. Compared to the industry average, Garrett's PE is at a discount, as the sector typically trades at higher multiples, reflecting its strong margins and cash flow generation. Historically, the stock's valuation has been volatile, but the current PE is near the lower end of its historical range, suggesting potential upside if the company meets growth expectations.
PE
11.2x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
8.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are notable due to GTX's leveraged balance sheet, with a debt-to-equity ratio of -1.88 and negative equity, resulting in a negative ROE of -38.65%. This structure amplifies earnings volatility and interest rate sensitivity. While the current ratio of 0.97 indicates adequate near-term liquidity, the company's reliance on debt financing could strain cash flows if revenue declines. Additionally, the payout ratio of 16.8% and dividend yield of 1.49% suggest limited flexibility for shareholder returns if cash flow weakens. The estimated EPS of $2.72 for the next year implies a forward PE of 12.17x, which is reasonable but assumes continued profitability; any margin compression could quickly erode valuation support.
