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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 impacted by several negative factors. Despite record normalized net earnings of CAD 110.73 million in Q4 2025, the company's industrial segment faced headwinds, and global volatility tied to tariffs and geopolitical uncertainty affected its results. Additionally, the company's acquisition strategy, including the recent purchase of Georg Fischer's Leipzig facility for €45 million, may be straining its resources. Furthermore, while Linamar's strong free cash flow of $937.2 million in 2025 and liquidity of $2.1 billion are positives, they may not be enough to offset concerns around its industrial segment's soft conditions.

1.c. Company Highlights

2. Linamar's Q4 2025 Earnings: A Strong Year Despite Challenges

Linamar reported a strong financial performance for 2025, with record earnings of $622.1 million, a 6.1% sales margin, and $1 billion of free cash flow. The company's EPS came out at $2.28, missing estimates of $2.84. Revenue growth was driven by the Mobility segment, which saw earnings up 47% in the quarter and 34% for the year. The company's net debt-to-EBITDA ratio stood at 0.77x, demonstrating its prudent balance sheet management.

Publication Date: Mar -06

📋 Highlights
  • Strong Financial Position:: Linamar maintained a net debt-to-EBITDA ratio of 0.77x in 2025, well below its 1.5x target, with $911.1 million cash and $2.1 billion liquidity.
  • Record Earnings & Free Cash Flow:: Generated $622.1 million in earnings (6.1% margin) and $1 billion in free cash flow, driven by Mobility segment growth (47% Q4 earnings rise).
  • Auto Industry Resilience:: Global auto production grew 3.7% in 2025, exceeding expectations, with CPV performance up 19.2% in North America.
  • Skyjack Market Gains:: Industrial’s Skyjack unit outperformed a -1.5% global market, achieving 15.9% volume growth and launching the SJ28 electric boom.
  • Industrial Segment Challenges:: Industrial sales fell 13.2% to $553.1 million in Q4, with normalized earnings down 25.7%, citing weak Ag and Access markets.

Segment Performance

The Mobility segment was the highlight of the year, with outstanding growth driven by the Aludyne acquisition and GF Leipzig ductile iron casting facility. The Industrial segment, however, faced challenges, with sales decreasing by 13.2% to $553.1 million, reflecting softer demand across both end markets in Access and Agriculture. Normalized Industrial operating earnings decreased by $23.5 million or 25.7% to $67.9 million.

Tariff Risks and Mitigation Strategies

Linda Hasenfratz, Executive Chair, emphasized that Linamar had a manageable level of bottom-line impact from tariffs, thanks to its strategy of producing product in the same continent as its customers. This approach helped mitigate tariff risks, as the company's largest business is the automotive sector, where customers are the importer of record and would be responsible for paying tariffs.

Outlook and Valuation

For 2026, Linamar expects double-digit growth in sales and normalized operating earnings in the Mobility segment, driven by ongoing program launches and contributions from recent acquisitions. Analysts estimate revenue growth at 3.5% for next year. With a P/E Ratio of 23.57 and EV/EBITDA of 4.28, the company's valuation appears reasonable, considering its strong growth prospects and low leverage. The company's commitment to returning cash to shareholders is evident in its share repurchase program, having returned nearly $139 million to shareholders through share repurchases.

Growth Opportunities

Linamar is expanding into new areas, including defense and robotics, and has made a strategic partnership with Regen Resource Recovery to commercialize battery-grade graphite. The company's entrepreneurial mindset and innovative culture are expected to drive growth in these new areas, providing access to a larger opportunity set.

3. NewsRoom

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Linamar Corporation to Acquire Winning BLW’s Remscheid and Penzberg Facilities, Expanding Its Forging and Gear Manufacturing

Mar -27

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Assessing Linamar’s Valuation After Recent Share Price Volatility

Mar -07

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Linamar (TSX:LNR) Is Down 5.9% After Record Q4 Earnings And Renewed Capital Returns Has The Bull Case Changed?

Mar -06

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Linamar Corp (LIMAF) Q4 2025 Earnings Call Highlights: Strong Mobility Growth and Record ...

Mar -05

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Linamar Q4 Earnings Call Highlights

Mar -05

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Record Performance Fuels Long-Term Value Creation for Linamar

Mar -04

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Linamar and Regen Resources Form Alliance to Advance Battery-Grade Graphite Development in Ontario

Mar -02

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Life Science Precision Parts Research Report 2025: A $13.92 Billion Market by 2030 Featuring Key Players - Gemsons, Arc, Precision Resource, Thermo Fisher Scientific, Stryker, Linamar, TS Prototypes

Feb -17

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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
Linamar

A-Score: 6.3/10

Value: 7.9

Growth: 5.1

Quality: 4.7

Yield: 3.0

Momentum: 8.5

Volatility: 8.3

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Magna

A-Score: 6.3/10

Value: 7.7

Growth: 4.1

Quality: 4.3

Yield: 7.0

Momentum: 7.0

Volatility: 7.3

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Lear

A-Score: 6.0/10

Value: 7.7

Growth: 4.9

Quality: 4.2

Yield: 5.0

Momentum: 7.0

Volatility: 7.3

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LKQ

A-Score: 5.5/10

Value: 7.7

Growth: 5.4

Quality: 4.9

Yield: 6.0

Momentum: 2.5

Volatility: 6.7

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Gentex

A-Score: 5.2/10

Value: 6.0

Growth: 5.6

Quality: 7.4

Yield: 3.0

Momentum: 2.0

Volatility: 7.3

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Dorman Products

A-Score: 5.1/10

Value: 4.5

Growth: 8.0

Quality: 6.5

Yield: 0.0

Momentum: 5.0

Volatility: 6.7

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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

86.17$

Current Price

86.17$

Potential

-0.00%

Expected Cash-Flows