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Auto Roundup: F Invests in Nickel Plant, STLA Collaborates With Ample & More
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Last week, the China Passenger Car Association released vehicle sales data for November. China's passenger vehicle sales grew 25% year over year to 2.1 million units, representing the fourth consecutive month of increase. November marked the highest monthly sales of new energy vehicles in the country in 2023 with 841,000 units sold, driven by increased year-end promotions and discounts.
On the news front, recreational vehicle maker Thor Industries, Inc. (THO - Free Report) , China’s electric vehicle company NIO Inc. (NIO - Free Report) and auto parts retailer AutoZone Inc. (AZO - Free Report) posted quarterly results. While AZO delivered a comprehensive beat on both fronts, Thor came up with mixed results. NIO delivered a narrower-than-expected loss but fell short of revenue estimates.
In light of the rising demand for electric vehicles (EVs), automakers are striving to secure raw materials like lithium, cobalt and nickel for EV batteries. To that end, U.S. legacy automaker Ford (F - Free Report) is investing in an under-construction nickel plant in Indonesia to strengthen its supply chain.
Meanwhile, Italian-American auto giant Stellantis (STLA - Free Report) joined forces with Ample to integrate Ample's Modular Battery Swapping technology into its EVs. Ample’s Modular Battery Swapping solution offers fast and convenient charging. As part of the Dare Forward 2030 plan, Stellantis aims to achieve a 100% passenger car battery electric vehicle (“BEV”) sales mix in Europe and a 50% passenger car and light-duty truck BEV sales mix in the United States by the end of the decade.
While STLA and NIO presently hold a Zacks Rank #1 (Strong Buy) and #2 (Buy), respectively, AZO, THO and F carry a Zacks Rank #3 (Hold) each currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Last Week’s Top Stories
Thor reported earnings of 99 cents per share for first-quarter fiscal 2024 (ended Oct 31, 2023), which surpassed the Zacks Consensus Estimate of 87 cents. The bottom line however tumbled 60.9% from the year-ago quarter’s earnings of $2.53 per share. The company registered revenues of $2,500.8 million for the quarter under review, lagging the Zacks Consensus Estimate of $2,510.4 million. The top line declined 19.5% year over year.
As of Oct 31, 2023, Thor had cash and cash equivalents of $425.8 million and long-term debt of $1,271.9 million. During the first quarter of fiscal 2024, THO repurchased $30 million of common stock at an average price of $91.61. The company has reaffirmed its full-year guidance for fiscal 2024. It projects its full-year consolidated net sales in the range of $10.5-$11 billion. The consolidated gross profit margin is expected to be in the range of 14.5-15%. Earnings per share are expected to be in the range of $6.25-$7.25.
AutoZone reported earnings of $32.55 per share for first-quarter fiscal 2024 (ended Nov 18, 2023), up 18.6% year over year. Earnings surpassed the Zacks Consensus Estimate of $31.01 per share. Net sales grew 5.1% year over year to $4,190.3 million. The top line also surpassed the Zacks Consensus Estimate of $4,171.9 million. In the reported quarter, domestic commercial sales totaled $1,092.9 million, up from $1,034.4 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose 1.2%.
During the quarter, AutoZone opened 17 new stores and closed one store in the United States. It opened five new stores in Mexico and four stores in Brazil. It exited the quarter with 6,316 stores in the United States, 745 in Mexico and 104 in Brazil. The total store count was 7,165 as of Nov 18, 2023.As of Nov 18, 2023, AutoZone had cash and cash equivalents of $282.9 million, up from $269.7 million as of Nov 19, 2022. Its total debt amounted to $8,583.5 million as of Nov 18, 2023, increasing from $6,328.3 million as of Nov 19, 2022.
Ford is investing in a battery-nickel plant in Indonesia to strengthen its supply chain. It is collaborating with PT Vale Indonesia and Zhejiang Huayou Cobalt Co. in a project to produce 120,000 tons of nickel chemicals per year for EV batteries. The nickel plant called Pomalaa, which is currently under construction, is likely to commence commercial production in 2026. Although the share of investment of each company in the project is unknown, the total investment is estimated to be around $4.5 billion.
Amid growing refinery investment in Indonesia, the country has become a significant producer of battery-compatible nickel. Per Lisa Drake, vice president of Ford's EV Programs and Energy Supply Chain, the direct investment in plants allows Ford to source nickel in cost-efficient ways. It also allows the automaker to keep the amount of nickel mined in line with the company’s sustainability target. Ford aims to produce more than 2 million EVs by 2026-end. By 2030, it expects EVs to account for 50% of its global sales, which will cement its position in the red-hot EV landscape.
Stellantis has signed a binding agreement with Ample to integrate Ample’s Modular Battery Swapping technology in its EVs. With this technology, EV users can swap their depleted EV battery with a fully charged battery in less than five minutes at a battery swapping station. Stellantis is also in talks with Ample to expand the application of Ample’s Modular Battery Swapping technology to meet the automaker’s fleet and consumer demand across other platforms and geographies.
The program that will use a fleet of 100 Fiat 500e within Stellantis’ Free2move car-sharing service is scheduled to start in 2024 in Madrid, Spain. The Fiat 500e is Stellantis’ highest-selling EV.Per Ricardo Stamatti, senior vice president & global head of Stellantis Energy & Free2move Charge, Ample’s Modular Battery Swapping solution can offer Stellantis’ customers higher energy efficiency, outstanding performance and lower range anxiety.
NIO incurred a loss per American Depositary Share of 37 cents in the third quarter of 2023, narrower than the Zacks Consensus Estimate of a loss of 43 cents. However, the reported loss was wider than the year-ago period's reported loss of 36 cents. Revenues of $2,613.3 million lagged the Zacks Consensus Estimate of $2,631.1 million but increased roughly 43% year over year due to higher delivery volumes. NIO delivered 55,432 vehicles (including 37,585 SUVs and 17,847 sedans) in the third quarter, up 75.4% year over year.
Vehicle margin in the reported quarter fell to 11% from 16.4% in third-quarter 2022 due to changes in product mix. Gross margin was 8%, down from 13.3% in the year-ago quarter. As of Sep 30, 2023, cash and cash equivalents totaled $3,301 million and long-term debt amounted to $1,666 million. For fourth-quarter 2023, NIO projects deliveries in the range of 47,000-49,000 vehicles, implying a 17.3-22.3% increase year over year. Revenues are estimated to be between $2,204 million and $2,289 million.
Price Performance
The following table shows the price movement of some of the major auto players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Auto Space?
Industry watchers will keep a tab on November new car registration data to be released by the European Automobile Manufacturers Association.
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Auto Roundup: F Invests in Nickel Plant, STLA Collaborates With Ample & More
Last week, the China Passenger Car Association released vehicle sales data for November. China's passenger vehicle sales grew 25% year over year to 2.1 million units, representing the fourth consecutive month of increase. November marked the highest monthly sales of new energy vehicles in the country in 2023 with 841,000 units sold, driven by increased year-end promotions and discounts.
On the news front, recreational vehicle maker Thor Industries, Inc. (THO - Free Report) , China’s electric vehicle company NIO Inc. (NIO - Free Report) and auto parts retailer AutoZone Inc. (AZO - Free Report) posted quarterly results. While AZO delivered a comprehensive beat on both fronts, Thor came up with mixed results. NIO delivered a narrower-than-expected loss but fell short of revenue estimates.
In light of the rising demand for electric vehicles (EVs), automakers are striving to secure raw materials like lithium, cobalt and nickel for EV batteries. To that end, U.S. legacy automaker Ford (F - Free Report) is investing in an under-construction nickel plant in Indonesia to strengthen its supply chain.
Meanwhile, Italian-American auto giant Stellantis (STLA - Free Report) joined forces with Ample to integrate Ample's Modular Battery Swapping technology into its EVs. Ample’s Modular Battery Swapping solution offers fast and convenient charging. As part of the Dare Forward 2030 plan, Stellantis aims to achieve a 100% passenger car battery electric vehicle (“BEV”) sales mix in Europe and a 50% passenger car and light-duty truck BEV sales mix in the United States by the end of the decade.
While STLA and NIO presently hold a Zacks Rank #1 (Strong Buy) and #2 (Buy), respectively, AZO, THO and F carry a Zacks Rank #3 (Hold) each currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Last Week’s Top Stories
Thor reported earnings of 99 cents per share for first-quarter fiscal 2024 (ended Oct 31, 2023), which surpassed the Zacks Consensus Estimate of 87 cents. The bottom line however tumbled 60.9% from the year-ago quarter’s earnings of $2.53 per share. The company registered revenues of $2,500.8 million for the quarter under review, lagging the Zacks Consensus Estimate of $2,510.4 million. The top line declined 19.5% year over year.
As of Oct 31, 2023, Thor had cash and cash equivalents of $425.8 million and long-term debt of $1,271.9 million. During the first quarter of fiscal 2024, THO repurchased $30 million of common stock at an average price of $91.61. The company has reaffirmed its full-year guidance for fiscal 2024. It projects its full-year consolidated net sales in the range of $10.5-$11 billion. The consolidated gross profit margin is expected to be in the range of 14.5-15%. Earnings per share are expected to be in the range of $6.25-$7.25.
AutoZone reported earnings of $32.55 per share for first-quarter fiscal 2024 (ended Nov 18, 2023), up 18.6% year over year. Earnings surpassed the Zacks Consensus Estimate of $31.01 per share. Net sales grew 5.1% year over year to $4,190.3 million. The top line also surpassed the Zacks Consensus Estimate of $4,171.9 million. In the reported quarter, domestic commercial sales totaled $1,092.9 million, up from $1,034.4 million recorded in the year-ago period. Domestic same-store sales (sales at stores open at least for a year) rose 1.2%.
During the quarter, AutoZone opened 17 new stores and closed one store in the United States. It opened five new stores in Mexico and four stores in Brazil. It exited the quarter with 6,316 stores in the United States, 745 in Mexico and 104 in Brazil. The total store count was 7,165 as of Nov 18, 2023.As of Nov 18, 2023, AutoZone had cash and cash equivalents of $282.9 million, up from $269.7 million as of Nov 19, 2022. Its total debt amounted to $8,583.5 million as of Nov 18, 2023, increasing from $6,328.3 million as of Nov 19, 2022.
Ford is investing in a battery-nickel plant in Indonesia to strengthen its supply chain. It is collaborating with PT Vale Indonesia and Zhejiang Huayou Cobalt Co. in a project to produce 120,000 tons of nickel chemicals per year for EV batteries. The nickel plant called Pomalaa, which is currently under construction, is likely to commence commercial production in 2026. Although the share of investment of each company in the project is unknown, the total investment is estimated to be around $4.5 billion.
Amid growing refinery investment in Indonesia, the country has become a significant producer of battery-compatible nickel. Per Lisa Drake, vice president of Ford's EV Programs and Energy Supply Chain, the direct investment in plants allows Ford to source nickel in cost-efficient ways. It also allows the automaker to keep the amount of nickel mined in line with the company’s sustainability target. Ford aims to produce more than 2 million EVs by 2026-end. By 2030, it expects EVs to account for 50% of its global sales, which will cement its position in the red-hot EV landscape.
Stellantis has signed a binding agreement with Ample to integrate Ample’s Modular Battery Swapping technology in its EVs. With this technology, EV users can swap their depleted EV battery with a fully charged battery in less than five minutes at a battery swapping station. Stellantis is also in talks with Ample to expand the application of Ample’s Modular Battery Swapping technology to meet the automaker’s fleet and consumer demand across other platforms and geographies.
The program that will use a fleet of 100 Fiat 500e within Stellantis’ Free2move car-sharing service is scheduled to start in 2024 in Madrid, Spain. The Fiat 500e is Stellantis’ highest-selling EV.Per Ricardo Stamatti, senior vice president & global head of Stellantis Energy & Free2move Charge, Ample’s Modular Battery Swapping solution can offer Stellantis’ customers higher energy efficiency, outstanding performance and lower range anxiety.
NIO incurred a loss per American Depositary Share of 37 cents in the third quarter of 2023, narrower than the Zacks Consensus Estimate of a loss of 43 cents. However, the reported loss was wider than the year-ago period's reported loss of 36 cents. Revenues of $2,613.3 million lagged the Zacks Consensus Estimate of $2,631.1 million but increased roughly 43% year over year due to higher delivery volumes. NIO delivered 55,432 vehicles (including 37,585 SUVs and 17,847 sedans) in the third quarter, up 75.4% year over year.
Vehicle margin in the reported quarter fell to 11% from 16.4% in third-quarter 2022 due to changes in product mix. Gross margin was 8%, down from 13.3% in the year-ago quarter. As of Sep 30, 2023, cash and cash equivalents totaled $3,301 million and long-term debt amounted to $1,666 million. For fourth-quarter 2023, NIO projects deliveries in the range of 47,000-49,000 vehicles, implying a 17.3-22.3% increase year over year. Revenues are estimated to be between $2,204 million and $2,289 million.
Price Performance
The following table shows the price movement of some of the major auto players over the last week and six-month period.
Image Source: Zacks Investment Research
What’s Next in the Auto Space?
Industry watchers will keep a tab on November new car registration data to be released by the European Automobile Manufacturers Association.