How Stronger 2026 Outlook And Diversification Beyond Turbochargers At Garrett Motion (GTX) Has Changed Its Investment Story

Fitch upgraded Garrett Motion's (GTX) long-term rating to 'BB+' from 'BB' due to improved leverage, forecasting 2.0x EBITDA leverage by 2026. The company's Q2 2026 EBIT margin was 15.6%, up 200 bps YoY, with strong profitability expected through 2029. Garrett has $177M cash and a $630M untapped credit facility.

Garrett Motion (GTX) shares fell 11.6% since its last earnings report, despite beating Q2 2026 estimates with EPS of $0.53 and sales of $976M. The company raised its full-year outlook, citing strong performance across product verticals and productivity gains. Analysts have upgraded estimates, giving GTX a Zacks Rank #2 (Buy).

Adjusted free cash flow was $122 million, representing an 80% conversion from adjusted EBIT. Garrett ended the quarter with total liquidity of $788 million, including $630 million of revolver capacity and $158 million of unrestricted cash. The company voluntarily repaid $50 million on its term loan during the quarter. Net leverage was 1.8 times, down sequentially, and Deason said Garrett has no near-term debt maturities.

Garrett Motion (NYSE: GTX) shares rose about 6.6% after Deutsche Bank upgraded the stock to Buy from Hold and lifted its price target to $36. The upgrade cited Garrett’s strong Q2 results versus consensus and the company’s upward revision to its full-year 2026 outlook.

Garrett Motion shares rose 3.6% in pre-open after the company reported Q2 2026 results that beat expectations. Revenue was $976 million vs about $965 million consensus, and adjusted EPS was $0.53 vs $0.47. Adjusted EBIT margin rose to 15.6%. Garrett raised full-year revenue guidance to $3.7 billion-$3.9 billion and net income to $300 million-$360 million, and declared a $0.08 dividend.

Garrett Motion reported Q2 sales of $976 million, above the $964.78 million analyst average, with revenue up 5% on a constant-currency basis. Adjusted EBITDA was $183 million versus $176.80 million expected, and net income was $101 million. The company raised 2026 net sales guidance to $3.7 billion to $3.9 billion and 2026 net income to $330 million to $360 million.