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Welcome to Episode #334 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks Stock Strategist and the Editor of Zacks Surprise Trader and Blockchain Innovators newsletters, David Bartosiak, to discuss what is going on in the auto industry.
It used to be easy to invest in the auto industry. You bought Tesla or Ferrari and that was it. But even those two bellwether stocks are down big in 2022.
Additionally, there is a lot of change going on in the wider auto industry from the component manufacturers, to the auto retailers, and those innovating in the electric vehicle space.
General Motors shares are down 34% in 2022. That’s a big sell-off. Are they a value?
General Motors is dirt cheap, with a forward P/E of 5.7. It also has a PEG ratio of just 0.6. A PEG ratio under 1.0 usually indicates a company has both growth and value, a powerful combination.
But earnings are expected to fall 2.3% in 2022 and another 9.6% in 2023.
Toyota shares are down 26.9% year-to-date, which is less than some of its peers. But shares are up just 3% over the last 2 years.
Toyota is cheap with a forward P/E of 8.6. However, earnings are expected to fall 13.9% in fiscal 2023 but rise in fiscal 2024, they are expected to jump 6.3%.
Image: Bigstock
Should You Buy the Auto Stocks Now?
Welcome to Episode #334 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks Stock Strategist and the Editor of Zacks Surprise Trader and Blockchain Innovators newsletters, David Bartosiak, to discuss what is going on in the auto industry.
It used to be easy to invest in the auto industry. You bought Tesla or Ferrari and that was it. But even those two bellwether stocks are down big in 2022.
Additionally, there is a lot of change going on in the wider auto industry from the component manufacturers, to the auto retailers, and those innovating in the electric vehicle space.
Should investors be buying auto stocks right now?
5 Auto Stocks to Consider in 2022
1. Tesla (TSLA - Free Report)
Tesla shares are down 39% in 2022 which has many people wondering if this is a buying opportunity.
On a forward P/E basis, Tesla shares aren’t cheap. They trade at 56x.
However, Tesla has never been a value stock. Earnings are expected to rise 79.2% in 2022 and another 30.5% in 2023.
With double digit growth still expected in the next year, is Tesla a deal for growth stock investors?
2. General Motors Company (GM - Free Report)
General Motors shares are down 34% in 2022. That’s a big sell-off. Are they a value?
General Motors is dirt cheap, with a forward P/E of 5.7. It also has a PEG ratio of just 0.6. A PEG ratio under 1.0 usually indicates a company has both growth and value, a powerful combination.
But earnings are expected to fall 2.3% in 2022 and another 9.6% in 2023.
Should General Motors be on your short list?
3. Ford Motor Company (F - Free Report)
Ford shares are down 37%, which means they are on sale.
Ford is dirt cheap on a forward P/E basis with a P/E of just 6.7. But it has a PEG ratio of 2.2, which is high to be a value.
Earnings are expected to rise 25.2% in 2022 but fall 2.9% in 2023.
Investors do get a juicy dividend, yielding 4.5%, for their patience.
Is it time to buy Ford?
4. Toyota Motors Corp. (TM - Free Report)
Toyota shares are down 26.9% year-to-date, which is less than some of its peers. But shares are up just 3% over the last 2 years.
Toyota is cheap with a forward P/E of 8.6. However, earnings are expected to fall 13.9% in fiscal 2023 but rise in fiscal 2024, they are expected to jump 6.3%.
Toyota pays a dividend, currently yielding 3.2%.
Is Toyota a deal in 2022?
5. Ferrari N.V. (RACE - Free Report)
Ferrari has a powerful brand, not just in automobiles, but in the luxury market. Is that enough?
Shares of Ferrari are down 26% year-to-date but it’s not cheap. Ferrari trades with a forward P/E of 40.
But is the growth there, like it is with Tesla? In 2022, earnings are expected to fall 8%, but rebound 17% in 2023.
Is this a buying opportunity in Ferrari?
What Other Auto Stocks are on Sale in 2022?
Tune into this week’s podcast to find out.