{
  "@context": "https://orbyd.app/schemas/dossier.v1.json",
  "ticker": "GTX",
  "name": "Garrett Motion Inc.",
  "url": "https://orbyd.app/dossiers/GTX/",
  "json_url": "https://orbyd.app/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": null,
  "outcome": "INVALIDATED",
  "outcome_date": "2026-07-29",
  "invalidation_fired": true,
  "themes": [
    "ai-datacenter-infrastructure",
    "cyclical-industrials"
  ],
  "tags": [],
  "sources": [],
  "notes": [
    "Datacenter E-Cooling revenue is not in FY26 guidance: first production shipments guided to 2027, datacenter-specific applications late 2027/early 2028 (2026-07-29 call).",
    "Core P&L remains cyclical light-vehicle and commercial turbochargers; today's guided datacenter exposure is MEG genset turbos inside the ~$200M FY26 industrial turbo line.",
    "Buyback authorization is finite: $135M left of the $250M 2026 program as of 2026-06-30, after $87M in Q1 and $28M in Q2.",
    "Quarterly dividend is $0.08/sh; the Q3 declaration is payable 2026-09-15. Q3 CY2026 results are not yet formally scheduled."
  ],
  "body_markdown": "## Current Thesis\nThe datacenter-cooling re-rate that carried Garrett from a ~$20 February base to a 52-week high of $36.23 has stopped paying. On 2026-07-29 the company delivered the print the story needed — Q2 EPS $0.53 against a $0.45 estimate, net sales $976M against $965.45M, record adjusted EBIT of $152M at a 15.6% margin — and lifted every line of FY26 guidance. Deutsche Bank upgraded to Buy with a $36 target the next morning. The tape absorbed all of it and gave it back: $29.92 close on 2026-07-28, +3.73% premarket to $31.035 on 07-29, $29.85 close on 2026-08-07. What the call actually clarified is that the cooling narrative has no 2026 P&L: 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.\" The narrative is SATURATED — everyone who wanted the story owns it, good news no longer produces a bid, and the next proof point is more than a year out. Price now sits on the $29–30 shelf with RSI(14) at 42.5, mid-range, with no base built.\n\n## Bull Case\n- **Q2 CY2026 (2026-07-29) beat on 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 15.6% margin, up 200bps; adjusted FCF $122M; cash $158M.\n- **Guide raised across all four measures.** FY26 net sales $3.7–3.9B (from $3.6–3.9B), net income $330–360M (from $300–360M), adjusted EBIT $560–600M (from $520–600M), adjusted FCF $385–475M (from $355–475M). Management framed the midpoint as $3.8B sales / $580M adjusted EBIT / $430M adjusted FCF.\n- **Datacenter exposure moved from press release into guided revenue.** Industrial turbo sales for FY26 were taken to approximately $200M from a prior \"$100M-plus,\" with more than $80M already booked in H1, and Garrett disclosed a major production award for MEG turbos used in datacenter gensets. This is the first datacenter dollar figure inside a guided number rather than a partnership announcement.\n- **Capital return continuing.** $28M repurchased in Q2, $115M year-to-date against the $250M 2026 authorization, $135M remaining; $0.08/sh dividend payable 2026-09-15; 186.8M shares outstanding at 2026-06-30.\n- **Every named sell-side mark sits above the tape.** Deutsche Bank upgrade to Buy, PT $36 (2026-07-30); Stifel Buy $36 and JPM Overweight $33 (both 2026-05-14) against a 2026-08-07 close of $29.85.\n\n## Bear Case\n- **The best print of the cycle was sold.** Seven sessions after a beat-and-raise and an upgrade, the close ($29.85, 2026-08-07) is below the pre-print close ($29.92, 2026-07-28). When a name stops rewarding its own good news, the marginal buyer is already in.\n- **The raise mostly lifted the floor.** The sales range went $3.6–3.9B → $3.7–3.9B; the top end did not move, and the $3.8B midpoint essentially matched the $3.785B consensus already on the tape.\n- **Cooling revenue is a 2027–2028 event.** First E-Cooling production shipments guided to 2027, datacenter applications to late 2027/early 2028 (2026-07-29 call). Nothing between here and then converts the story into reported revenue.\n- **Insider distribution into the highs, no disclosed offsetting buying.** CFO Sean Deason sold 110,000 sh at $31.93 (2026-06-05);\n- **Repurchase pace decelerated as the stock fell.** $87M in Q1 versus $28M in Q2 — the buyback did not step up into the drawdown.\n- **Structure has rolled.** -17.6% from the $36.23 52-week high, +3.2% over three months, RSI(14) 42.5. The 50-day stood at $31.63 on 2026-07-10; the 2026-08-07 close is well beneath that level.\n\n## Setup & Price Structure\nLife-cycle: **SATURATED**, dated 2026-07-29/30 — the beat-and-raise and the Deutsche Bank upgrade landed inside 24 hours and produced one premarket pop with no follow-through, while coverage of the cooling angle is now broad and repetitive. The February-base uptrend is not broken (the 200-day was $20.96 on 2026-07-10, far below price), but the intermediate structure has turned over: three consecutive lower highs since the late-June $36.23 peak and a drift into a $29–30 area marked by the 07-28 and 08-07 closes.\n\nCrowding and positioning observables, stated as observables: three named sell-side targets at or above $33 with no published sell rating; a beat-and-raise that produced no closing gain; insider sales at $31.93 and $33.00 with no disclosed open-market purchases; a buyback that shrank from $87M to $28M quarter-over-quarter; and $135M of authorization left, which is a finite bid rather than a standing one. RSI at 42.5 is the uncomfortable middle — not oversold enough to mark a flush, not strong enough to signal accumulation.\n\nInference, not measurement: the $29–30 area is where the pre-print sellers and the post-print disappointment meet, so it is the level that carries information. A weekly close that holds it while the industrial-turbo line compounds toward the guided ~$200M would argue the drawdown was multiple compression rather than thesis failure.\n\n## Catalyst Calendar (next 30 days)\n\n- **2026-09-15** — $0.08/sh quarterly dividend payable, declared with Q2 results. Confirms the capital-return cadence; not a narrative event.\n- **~2026-10-28 (est.)** — Q3 CY2026 results. Not yet formally scheduled; Q2 landed 2026-07-29. First read on whether industrial turbo tracks to the raised ~$200M FY26 figure and whether FY26 sales guidance holds at $3.7B+.\n\n## Elapsed catalysts\n\n- **No scheduled company event inside the next 30 days.** Q2 was reported 2026-07-29; the next company-controlled print is roughly a quarter out. *(passed 11d ago)*\n- **2027 (est.)** — first E-Cooling production shipments per the 2026-07-29 call; datacenter-specific applications late 2027/early 2028. The date that actually settles the cooling thesis sits outside any tradeable window from here. *(passed 11d ago)*\n\n## What Would Change Our Mind\nThe structure that has to fail is the $29–30 shelf that has absorbed the post-print supply. **A weekly close below $29** loses it and the rising trend off the February base, and would date the re-rate as fully unwound; a secondary confirmation would be FY26 sales guidance cut back below $3.7B at the Q3 print, or that print passing with E-Cooling still absent from guided revenue and industrial turbo tracking short of ~$200M.\n\nWhat would argue the other way, with equal specificity: a weekly close back above $33 — reclaiming the JPM mark and the July trading area — on the back of a named datacenter E-Cooling order with dollars attached, or an industrial-turbo figure at the Q3 print running ahead of the ~$200M FY26 guide. Absent one of those, the name is a wait-for-a-base situation and fresh entries into the current drift have no near-term event to resolve them.\n\n## Correlation Notes\nGarrett re-rated on a datacenter-cooling narrative but earns its revenue from cyclical light-vehicle and commercial turbochargers. That gap means headline risk now arrives from the datacenter power/cooling complex — Vertiv, Modine, Trane, Ingersoll Rand (the 2026-05-12 partner) — while reported results depend on global vehicle build rates and the industrial genset cycle. The two can move in opposite directions, and the July–August drawdown occurred through a window in which the company's own beat-and-raise was the dominant news, so it reads as name-specific de-rating rather than sector beta.\n\nWithin the guided P&L, the datacenter linkage that exists today runs through MEG turbos sold into backup gensets, which ties to hyperscaler datacenter build schedules and the large-bore engine makers, not to liquid-cooling capex. Any read-across from a cooling-hardware peer's order book is therefore an inference about 2027–2028 optionality, not about the FY26 $3.7–3.9B guide.",
  "first_seen": "2026-05-13",
  "last_analyzed": "2026-08-08T15:37:28+00:00",
  "last_synthesized": "2026-08-08",
  "last_update_source": "watchlist_research",
  "license": "Content © orbyd. Cite the canonical URL."
}