Adient Plunges 14.7% Intraday: What's Behind the Sharp Selloff?

Summary
• Adient (ADNT) reports Q4 2025 results with $333M goodwill impairment charge
• Stock opens at $18.72, plummets to $18.72 intraday low, trades at $20.465 (-14.7%)
• Earnings report reveals GAAP net loss of $281M vs. $18M profit in 2024

Adient's stock is in freefall after a shocking $333 million goodwill impairment charge wiped out nearly 16% of its prior-year goodwill balance. The automotive seating giant's Q4 earnings report triggered a 14.7% intraday selloff, with shares trading below $20.47 despite a $204 million free cash flow generation. The sharp move highlights structural issues in its business model as investors reassess valuation metrics.

Goodwill Impairment and Earnings Shock Trigger Sell-Off
Adient's 14.7% intraday collapse stems from a $333 million non-cash goodwill impairment charge that turned its Q4 2025 results into a $281 million GAAP net loss. This massive write-down signals fundamental deterioration in an acquired business unit, eroding investor confidence in management's capital allocation discipline. The impairment, combined with a 26.4% free cash flow decline to $204 million and EMEA segment margin contraction, created a perfect storm of valuation concerns. Despite $958 million in cash reserves, the impairment's scale (16.5% of prior goodwill) exposed structural weaknesses in its asset base.

Automotive Components Sector Mixed as Lear Rises 0.13%
Options Playbook: Capitalizing on Volatility and Support Levels
• 200-day average: 18.90 (below current price)
• RSI: 59.47 (neutral)
• MACD: -0.065 (bearish divergence)
• Bollinger Bands: 22.36-24.46 (current price at 20.47)
• 30D support: 23.19-23.26

Adient's technicals suggest a bearish bias with key support at $17.50 (lower Bollinger Band) and $16.86 (200D support). The 59.47 RSI indicates neutral momentum, but the negative MACD histogram (-0.065) signals ongoing selling pressure. Traders should monitor the $17.50 psychological level, where the ADNT20251219P17.5 put option offers compelling leverage. For directional plays, the ADNT20251219C20 call option provides upside potential if the stock breaks above $22.36 (lower Bollinger Band).

• ADNT20251219P17.5 (Put)
- Strike: $17.50
- Expiry: 2025-12-19
- IV: 50.03% (high volatility)
- Leverage: 56.18% (strong)
- Delta: -0.1735 (moderate sensitivity)
- Theta: -0.006595 (moderate time decay)
- Gamma: 0.072158 (high sensitivity to price moves)
- Turnover: 36 (liquid)
- Payoff at 5% downside: $2.97 (max profit if price drops to $19.44)
- This put option offers 56% leverage with 50% implied volatility, making it ideal for capitalizing on a potential breakdown below $17.50. The 0.072 gamma ensures responsiveness to price swings.

• ADNT20251219C20 (Call)
- Strike: $20.00
- Expiry: 2025-12-19
- IV: 212.49% (extreme volatility)
- Leverage: 3.37% (modest)
- Delta: 0.6535 (high sensitivity)
- Theta: -0.068448 (rapid time decay)
- Gamma: 0.024456 (moderate sensitivity)
- Turnover: 0 (illiquid)
- Payoff at 5% downside: $0.00 (out-of-the-money)
- This call option's 212% IV reflects extreme market uncertainty. While delta is high, the zero turnover indicates poor liquidity. Only suitable for aggressive bulls expecting a rebound above $22.36.

Aggressive bears should prioritize the ADNT20251219P17.5 put option for a 56% leveraged play on a breakdown below $17.50. Watch for a close below $18.90 (200D support) to confirm bearish momentum.

Backtest Adient Stock Performance
The back-test has been completed. Key assumptions that were auto-filled for you:• Price series: ADNT (close prices) from 2022-01-03 to 2025-11-05. • Entry rule: buy at the same-day close whenever the intraday low is at least 15 % below the previous close. • Risk controls: 12 % take-profit, 8 % stop-loss, and a 10-day maximum holding period (chosen as typical short-term rebound parameters; feel free to revise). Open the interactive report below for full statistics, equity curve, trade list and distribution analysis.You can scroll through the interactive module to review cumulative return, trade-by-trade performance, risk metrics, and the distribution of holding-period returns. Let me know if you’d like to tweak the risk parameters or explore additional scenarios.

Critical Juncture: Watch $17.50 Support and Earnings Catalysts
Adient's 14.7% selloff has created a high-risk, high-reward scenario with $17.50 as the critical support level. The $333 million impairment charge and deteriorating free cash flow conversion highlight structural risks, but the healthy net leverage ratio (1.63x) provides some downside cushion. Sector leader Lear (LEA) is up 0.13% today, suggesting automotive components remain resilient. Investors should prioritize the ADNT20251219P17.5 put option for a leveraged bearish play while monitoring the Q4 earnings call for management's restructuring plans. A close below $18.90 would validate the bear case, while a rebound above $22.36 could trigger a short-covering rally.