{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "GTX",
  "name": "Garrett Motion Inc.",
  "url": "https://frontierpicks.com/dossiers/GTX/",
  "json_url": "https://frontierpicks.com/dossiers/GTX.json",
  "status": "DORMANT",
  "current_conviction": "LOW",
  "graded_conviction": "LOW",
  "archetype": {
    "code": "a4",
    "n": 4
  },
  "current_thesis": "Turbo cash-cow re-rated (~8–9x → ~18x) on a datacenter/industrial oil-free cooling narrative; the parabolic Feb→June leg (~$20→$36) is spent, shares faded ~11% to the 50-day near $32.30, and the ~late-July Q2 print is the first chance to attach real cooling revenue. Fully-priced, maturing, a wait-for-the-print name.",
  "invalidation_trigger": "A weekly close below $29 loses the May–June breakout shelf and the rising trend off the February base. Secondary: an FY26 sales guide cut below the $3.6B floor, or a Q2 print (~late July) with no datacenter/industrial-cooling revenue line, breaks the re-rate thesis.",
  "catalyst_date": "2026-09-15",
  "outcome": "INVALIDATED",
  "outcome_date": "2026-07-29",
  "invalidation_fired": true,
  "themes": [
    "ai-datacenter-infrastructure",
    "cyclical-industrials"
  ],
  "tags": [],
  "sources": [],
  "notes": [
    "E-Cooling revenue is not in FY26 guidance: first production shipments guided to 2027, datacenter-specific applications to late 2027/early 2028 (2026-07-29 call).",
    "Core P&L remains cyclical light-vehicle and commercial turbochargers; guided datacenter exposure today is MEG genset turbos inside the ~$200M FY26 industrial turbo line.",
    "Buyback authorization is finite: $135M left of the $250M 2026 program at 2026-06-30, after $87M in Q1 and $28M in Q2.",
    "Quarterly dividend is $0.08/sh, payable 2026-09-15. Q3 CY2026 results are not yet formally scheduled; Q2 was reported 2026-07-29."
  ],
  "body_markdown": "\n_Reference close: $26.62 (2026-08-21 adjusted daily bars). All price levels below are market levels._\n\n## GTX — Garrett Motion Inc.\n\n## Current Thesis\nThe $29–30 shelf that framed the datacenter-cooling re-rate is gone. Garrett closed $29.85 on 2026-08-07, $27.91 on 2026-08-18, traded $27.75–$28.33 on 2026-08-19, and closed $26.62 on 2026-08-21 — 26.5% under the $36.23 closing high set 2026-06-30, RSI(14) at 23.0, a three-month price change of -19.8%. The slide ran through the two events most likely to arrest it: JP Morgan maintained Overweight and raised its target to $37 on 2026-08-10, and CFO Sean Deason plus SVP Strategy Nils Martens held a fireside chat at the J.P. Morgan Automotive Conference on 2026-08-12 (announced 2026-08-04). Nothing measured in the business broke — FY26 guidance was raised on 2026-07-29 to $3.7–3.9B sales and $560–600M adjusted EBIT. What broke is the multiple the oil-free cooling story bought, which the 2026-07-29 call dated to 2027 at the earliest. The narrative leg is dead: the structure that carried it has failed and fresh bullish marks are being absorbed without a bid. The cash-cow turbo business is a separate question and is not what re-rated the stock from ~8–9x to ~18x.\n\n## Bull Case\n- **Q2 CY2026 (2026-07-29) beat both lines.** Net sales $976M (+7% reported, +5% constant currency) vs $965.45M consensus; EPS $0.53 vs $0.45; net income $101M; record adjusted EBIT $152M at a 15.6% margin, +200bps; adjusted FCF $122M; cash $158M.\n- **Guidance raised on all four measures (2026-07-29).** FY26 net sales $3.7–3.9B (from $3.6–3.9B), net income $330–360M, adjusted EBIT $560–600M, adjusted FCF $385–475M; management framed the midpoint at $3.8B / $580M / $430M.\n- **Datacenter exposure now sits inside a guided number.** FY26 industrial turbo sales taken to approximately $200M from a prior \"$100M-plus,\" with more than $80M booked in H1 and a disclosed production award for MEG turbos used in datacenter gensets (2026-07-29 call).\n- **Every named sell-side mark is above the tape.** JPM Overweight $37 (2026-08-10), Deutsche Bank Buy $36 on its 2026-07-30 upgrade, Stifel Buy $36 (2026-05-14) — against a $26.62 close on 2026-08-21.\n- **Capital return is still funded.** $135M of the $250M 2026 repurchase authorization remained at 2026-06-30 after $87M in Q1 and $28M in Q2; $0.08/sh dividend payable 2026-09-15; 186.8M shares outstanding at 2026-06-30.\n- **Momentum is stretched the other way.** RSI(14) 23.0 on 2026-08-21, against the same indicator flagging GTX as an overbought consumer-discretionary name in a 2026-05-12 Benzinga screen.\n\n## Bear Case\n- **The best print of the cycle, an upgrade and a target raise all failed to hold a level.** $29.92 close 2026-07-28 (pre-print) → $29.85 on 2026-08-07 → $26.62 on 2026-08-21, with the JPM $37 mark landing 2026-08-10 inside that slide.\n- **The July raise mostly lifted the floor.** Sales guidance moved $3.6–3.9B → $3.7–3.9B; the top of the range did not move.\n- **Cooling revenue is a 2027–2028 event.** CEO Olivier Rabiller put first E-Cooling production shipments in 2027 and datacenter-specific applications \"between the end of 2027 for data centers and beginning of 2028\" (2026-07-29 call). Nothing between now and then converts the story into reported revenue.\n- **Insider distribution into the highs with no disclosed offsetting purchases.** CFO Sean Deason sold 110,000 shares at $31.93 (2026-06-05); SVP Thierry Mabru sold 70,000 shares at $32.99–$33.00 (2026-05-29, Form 4 accepted 2026-06-01).\n- **The buyback pace halved as the stock fell.** $87M repurchased in Q1 versus $28M in Q2; the company did not step up into the drawdown, and $135M of authorization is what remains.\n- **Core P&L is cyclical.** The revenue that funds the story is light-vehicle and commercial-vehicle turbochargers, exposed to production schedules and to FX — the 200bps gap between +7% reported and +5% constant-currency growth in Q2 shows the currency component.\n\n## Setup & Price Structure\n- **The prior shelf is now overhead.** Price was contained between roughly $29 and $31 from 2026-07-28 through 2026-08-07; the 2026-08-21 close of $26.62 sits below that entire band, so the old support is resistance.\n- **Distance and speed.** -26.5% from the $36.23 closing high of 2026-06-30, -6.12% in the week to 2026-08-19 per third-party quote data, market capitalisation roughly $5.21B on the same date.\n- **Oversold without a base.** RSI(14) 23.0 at the 2026-08-21 close, with the 2026-08-19 session bracketed $27.75–$28.33 and the following prints lower. An oversold reading marks velocity; no higher low has printed since 2026-08-07 in the daily series.\n- **Crowding and positioning observables.** Three published targets ($37, $36, $36) sit 35–39% above the last close, a spread that has widened as price fell rather than closing; officers sold at $31.93 and $33.00 in late May/early June with no disclosed open-market buying since; the company's own repurchase pace fell from $87M to $28M quarter-over-quarter; no new insider filings have surfaced in coverage since the June Form 4s. Retail-facing screens covered the name as overbought on 2026-05-12 near the top of the leg.\n- **Next reference below.** The published frame put the leg's origin near $20 in February 2026. Between $26.62 and that area, the January–February consolidation is the structure a reader should watch; nothing in the June–August range now sits underneath.\n\n## Catalyst Calendar (next 30 days)\n\n- **2026-09-15** — $0.08/sh quarterly dividend payable, declared with Q2 results. Confirms capital-return cadence; advances nothing in the cooling narrative.\n- **~2026-10-28 (est.), outside the 30-day window** — Q3 CY2026 results, not yet formally scheduled; Q2 landed 2026-07-29. First check on whether H2 industrial turbo tracks toward the ~$120M implied by the ~$200M FY26 figure against $80M-plus in H1, and the next window for any dollar figure attached to E-Cooling.\n\n## Elapsed catalysts\n\n- **No scheduled company presentation** — the 2026-08-12 J.P. Morgan Automotive Conference fireside chat (announced 2026-08-04) has come and gone with no guidance update issued alongside it, and no further appearance is on the calendar within the window. *(passed 14d ago)*\n\n## What Would Change Our Mind\nThe read that the re-rate leg is finished depends on one observable: good news no longer producing a bid. That has held from 2026-07-29 (beat-and-raise) through 2026-07-30 (DB upgrade) to 2026-08-10 (JPM $37). It would be wrong if the August drawdown is a valuation reset inside an intact business trend — a weekly close back above $30, ideally with Q3 repurchases above the $28M Q2 pace, would say the drawdown was flow rather than a narrative failure. On the downside the structure question is gradeable: a weekly close below $25 gives up the whole June–August range and puts the February 2026 origin of the leg back into the frame. On the fundamental side, an FY26 sales guide cut beneath the $3.7B floor at the Q3 print, or a Q3 call that restates the 2027 first-shipment window later, would move the break from multiple to earnings.\n\n## Correlation Notes\n- **Datacenter-cooling complex.** Garrett's cooling exposure is routed through partners — the multiyear oil-free centrifugal compressor module partnership with Ingersoll Rand announced 2026-05-12 — so cooling-adjacent tape and any rollout commentary from those partners moves GTX before any Garrett revenue does.\n- **Auto-supplier cyclicals.** Q2 net sales of $976M come overwhelmingly from light-vehicle and commercial-vehicle turbochargers; light-vehicle production data and OEM schedules drive the number that funds everything else.\n- **FX.** Reported growth ran 200bps above constant currency in Q2 CY2026 (+7% vs +5%), so a dollar move reads directly into reported sales against the $3.7–3.9B guide.\n- **AI-infrastructure beta.** The stock trades with the AI-datacenter basket on a revenue line that does not yet exist in the P&L; that asymmetry is why a basket drawdown hits the multiple harder than the guide.",
  "first_seen": "2026-05-13",
  "last_analyzed": "2026-08-22T08:52:40+00:00",
  "last_synthesized": "2026-08-22",
  "last_update_source": "watchlist_research",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}