Garrett Motion (GTX) is back in focus after reporting its second quarter 2026 results, raising full year guidance, declaring a cash dividend, and updating investors on recent share repurchases.

The latest earnings, raised guidance, dividend declaration, and buyback update appear to have supported Garrett Motion's momentum, with a 1-day share price return of 2.71% and a 90-day share price return of 16.62%, alongside a 1-year total shareholder return of 150.84% and a 5-year total shareholder return of 340.34%, which point to strong long term compounding.

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After this sharp run and with Garrett Motion now trading near its updated outlook and a higher analyst target, the key issue is whether most of the upside is already in the rearview mirror or if valuation still leaves room ahead.

Most Popular Narrative: 11.9% Undervalued

Garrett Motion's most followed narrative puts fair value at $35.67 per share compared with the latest close at $31.43, which suggests analysts see further value supported by specific growth drivers and cash flow expectations.

Ongoing innovation and proof-of-concept awards in zero-emission technologies (E-Powertrain, E-Cooling, and fuel cell compressors) and expansion in industrial/non-automotive end markets are positioning Garrett to capture higher-margin business opportunities and diversified growth, supporting both revenue and future margin expansion.

Want to understand why this narrative sees more upside in Garrett Motion at this price? The story leans heavily on measured revenue growth, firmer margins, and a future earnings multiple that differs from today. Curious which specific profit path and cash flow profile anchor that $35.67 fair value.

Result: Fair Value of $35.67 (UNDERVALUED)

However, Garrett Motion still leans heavily on gasoline and diesel turbocharger demand, and any setback in scaling its newer zero emission and non auto products could undermine this upbeat narrative.

Another View: Garrett Motion Through The P/E Lens

The SWS DCF model suggests Garrett Motion is undervalued, yet the P/E picture is more mixed. The stock trades on 16.4x earnings versus a 14.6x peer average and a 19.9x US Auto Components industry, while the fair ratio is 18x. That gap raises a simple question: is this a margin of safety or a premium for quality?

Next Steps

With Garrett Motion, does the mix of optimism and concern in this article match your own view, or raise fresh questions you want answered? If you want a clearer picture before making any decisions, take a moment to review the 3 key rewards and 3 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.