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Auto Stocks get Upgraded: 3 Top-Ranked Stocks to Buy Now
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The automotive industry is experiencing a wave of optimism as several key players witness significant upgrades in their earnings estimates. In this article, we highlight three top-ranked auto stocks that have caught the attention of investors and analysts alike.
These stocks include Honda Motor Co. (HMC - Free Report) , Ford Motor (F - Free Report) , and General Motors (GM - Free Report) . With positive momentum and upward trending earnings revisions, these companies are positioned as attractive investment opportunities.
Auto industry incumbents have struggled over the last decade, with their stocks considerably underperforming the broad market. Tesla (TSLA - Free Report) , and the explosion of electric vehicle options have flipped the industry on its ear, and many are now rushing to catch up. But with bullish catalysts, and exciting new products in the pipe, it may be time for the legacy auto stocks to start a new bull run.
Image Source: Zacks Investment Research
Honda Motor Co.
Honda Motor Company is a globally recognized automotive manufacturer that has built a strong reputation for its commitment to quality, innovation, and reliability. With a rich history dating back to 1948, Honda has become one of the leading players in the automotive industry.
The company's diverse product portfolio includes automobiles, motorcycles, power equipment, and even aircraft. Honda vehicles are known for their fuel efficiency, cutting-edge technology, and exceptional performance. HMC has a global presence and caters to a wide range of markets, solidifying its position as a trusted brand. With a focus on sustainability and environmental responsibility, Honda continues to adapt to market demands while maintaining its core values of quality and customer satisfaction.
Although HMC stock has had a mediocre performance over the last decade, 2023 has been exceptional, with the stock up 31% YTD. Looking at the chart, we can see the price has cleared a level of resistance, broken out of a bullish pendant, and shows incredible momentum.
Image Source: TradingView
Additionally, HMC has a Zacks Rank #1 (Strong Buy), reflecting upward trending earnings revisions. Current quarter earnings have been revised higher by 23.6% and are expected to grow 32.8% YoY. FY23 earnings have been upgraded by 20.7% and are expected to climb 30.7% YoY.
The foreign automotive industry also sits in the top 8% of the Zacks Industry Rank.
Image Source: Zacks Investment Research
With growing sales and earnings, and a flat stock performance over the last decade, Honda Motor Co.’s valuation has become more and more attractive. HMC is trading at a one-year forward earnings multiple of 7.8x, which is below the industry average of 9.1x, and below its 10-year median of 9.4x. HMC also offers a dividend yield of 2.2%.
Image Source: Zacks Investment Research
Ford Motor
Ford Motor an iconic American automotive manufacturer with a long history dating back to 1903. Over the years, Ford has established itself as a global leader in the industry, known for its wide range of vehicles that cater to diverse consumer needs.
From its legendary Ford Mustang to its popular F-150 pickup trucks and SUVs, Ford has consistently delivered vehicles that combine performance, innovation, and affordability. The company is committed to staying at the forefront of technological advancements, evident through its investments in electric and autonomous vehicle development. Ford's global presence allows it to tap into various markets worldwide, serving both individual consumers and commercial customers.
After holding a precarious level of support for the last year, F has broken out from a descending triangle rallying 13% in just the last month.
Image Source: TradingView
Ford Motors also currently boasts a Zacks Rank #1 (Strong Buy). Next quarter earnings have been revised higher by 10.7% and FY23 earnings estimates raised 16%. FY23 sales are also projected to grow 7.5% YoY. It is also worth noting that F pays a generous dividend yield of 4.4%, which it raised 50% over this last year.
Image Source: Zacks Investment Research
In a recent interview with Ford Motor’s CEO Jim Farley, he laid out the company’s strategy regarding the EV market going forward. In the interview he noted a few details that differed from what I expected, and what most other automakers are doing.
First, he said that Ford does not want to create a commoditized product. It doesn’t want to be going after the mass market models like Tesla, with its now $25,000 model 3. Rather they want to be selective about the vehicles they electrify so to really niche down, which helps them avoid competing with the likes of Tesla.
The next thing he remarked was that the first iteration of the Ford electric vehicles were analog, and this next lineup is going to be digital. Ford wants to create a proper platform from which to build from, not just a new version of the car. This means that the car could have many creative new purposes in our lives than we previously imagined.
From the interview and strategic decisions coming out of Ford it seems that the company could be going down a completely different path, which could lead to a new inflection higher for the stock.
General Motors is a prominent American multinational automotive company that has played a pivotal role in shaping the global automotive industry. With a history spanning over a century, GM has established itself as one of the largest and most influential manufacturers of automobiles.
The company boasts an impressive portfolio of brands, including Chevrolet, GMC, Cadillac, and Buick, offering a wide range of vehicles to cater to diverse consumer preferences.
The company's vehicles are recognized for their quality, performance, and safety features, making them popular choices among consumers worldwide. GM operates on a global scale, with manufacturing facilities and a strong presence in various international markets.
GM as well earns a Zacks Rank #1 (Strong Buy) reflected by its upward trending earnings revisions. In the chart, we can see that earnings have been steadily trending higher since the start of 2023. Current quarter earnings have been revised higher by 4.5% and are expected to climb a whopping 44% YoY to $1.64 per share.
Additionally, current quarter sales are projected to grow 16.6% YoY and FY23 sales are expected to grow 4.6% YoY.
Image Source: Zacks Investment Research
After trending down for the last year and a half, GM looks like it may have found a floor. The stock has held a significant level of support, and looks to have formed a triple bottom, signaling what could be a major low for the stock.
Image Source: TradingView
Bottom Line
The auto industry is an incredibly challenging and competitive one that is amid a major transition. However, with improving earnings and market conditions the automotive stocks listed may present opportunities to buy unloved stocks at bargain prices.
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Auto Stocks get Upgraded: 3 Top-Ranked Stocks to Buy Now
The automotive industry is experiencing a wave of optimism as several key players witness significant upgrades in their earnings estimates. In this article, we highlight three top-ranked auto stocks that have caught the attention of investors and analysts alike.
These stocks include Honda Motor Co. (HMC - Free Report) , Ford Motor (F - Free Report) , and General Motors (GM - Free Report) . With positive momentum and upward trending earnings revisions, these companies are positioned as attractive investment opportunities.
Auto industry incumbents have struggled over the last decade, with their stocks considerably underperforming the broad market. Tesla (TSLA - Free Report) , and the explosion of electric vehicle options have flipped the industry on its ear, and many are now rushing to catch up. But with bullish catalysts, and exciting new products in the pipe, it may be time for the legacy auto stocks to start a new bull run.
Image Source: Zacks Investment Research
Honda Motor Co.
Honda Motor Company is a globally recognized automotive manufacturer that has built a strong reputation for its commitment to quality, innovation, and reliability. With a rich history dating back to 1948, Honda has become one of the leading players in the automotive industry.
The company's diverse product portfolio includes automobiles, motorcycles, power equipment, and even aircraft. Honda vehicles are known for their fuel efficiency, cutting-edge technology, and exceptional performance. HMC has a global presence and caters to a wide range of markets, solidifying its position as a trusted brand. With a focus on sustainability and environmental responsibility, Honda continues to adapt to market demands while maintaining its core values of quality and customer satisfaction.
Although HMC stock has had a mediocre performance over the last decade, 2023 has been exceptional, with the stock up 31% YTD. Looking at the chart, we can see the price has cleared a level of resistance, broken out of a bullish pendant, and shows incredible momentum.
Image Source: TradingView
Additionally, HMC has a Zacks Rank #1 (Strong Buy), reflecting upward trending earnings revisions. Current quarter earnings have been revised higher by 23.6% and are expected to grow 32.8% YoY. FY23 earnings have been upgraded by 20.7% and are expected to climb 30.7% YoY.
The foreign automotive industry also sits in the top 8% of the Zacks Industry Rank.
Image Source: Zacks Investment Research
With growing sales and earnings, and a flat stock performance over the last decade, Honda Motor Co.’s valuation has become more and more attractive. HMC is trading at a one-year forward earnings multiple of 7.8x, which is below the industry average of 9.1x, and below its 10-year median of 9.4x. HMC also offers a dividend yield of 2.2%.
Image Source: Zacks Investment Research
Ford Motor
Ford Motor an iconic American automotive manufacturer with a long history dating back to 1903. Over the years, Ford has established itself as a global leader in the industry, known for its wide range of vehicles that cater to diverse consumer needs.
From its legendary Ford Mustang to its popular F-150 pickup trucks and SUVs, Ford has consistently delivered vehicles that combine performance, innovation, and affordability. The company is committed to staying at the forefront of technological advancements, evident through its investments in electric and autonomous vehicle development. Ford's global presence allows it to tap into various markets worldwide, serving both individual consumers and commercial customers.
After holding a precarious level of support for the last year, F has broken out from a descending triangle rallying 13% in just the last month.
Image Source: TradingView
Ford Motors also currently boasts a Zacks Rank #1 (Strong Buy). Next quarter earnings have been revised higher by 10.7% and FY23 earnings estimates raised 16%. FY23 sales are also projected to grow 7.5% YoY. It is also worth noting that F pays a generous dividend yield of 4.4%, which it raised 50% over this last year.
Image Source: Zacks Investment Research
In a recent interview with Ford Motor’s CEO Jim Farley, he laid out the company’s strategy regarding the EV market going forward. In the interview he noted a few details that differed from what I expected, and what most other automakers are doing.
First, he said that Ford does not want to create a commoditized product. It doesn’t want to be going after the mass market models like Tesla, with its now $25,000 model 3. Rather they want to be selective about the vehicles they electrify so to really niche down, which helps them avoid competing with the likes of Tesla.
The next thing he remarked was that the first iteration of the Ford electric vehicles were analog, and this next lineup is going to be digital. Ford wants to create a proper platform from which to build from, not just a new version of the car. This means that the car could have many creative new purposes in our lives than we previously imagined.
From the interview and strategic decisions coming out of Ford it seems that the company could be going down a completely different path, which could lead to a new inflection higher for the stock.
https://www.youtube.com/watch?v=8IhSWsQlaG8
General Motors
General Motors is a prominent American multinational automotive company that has played a pivotal role in shaping the global automotive industry. With a history spanning over a century, GM has established itself as one of the largest and most influential manufacturers of automobiles.
The company boasts an impressive portfolio of brands, including Chevrolet, GMC, Cadillac, and Buick, offering a wide range of vehicles to cater to diverse consumer preferences.
The company's vehicles are recognized for their quality, performance, and safety features, making them popular choices among consumers worldwide. GM operates on a global scale, with manufacturing facilities and a strong presence in various international markets.
GM as well earns a Zacks Rank #1 (Strong Buy) reflected by its upward trending earnings revisions. In the chart, we can see that earnings have been steadily trending higher since the start of 2023. Current quarter earnings have been revised higher by 4.5% and are expected to climb a whopping 44% YoY to $1.64 per share.
Additionally, current quarter sales are projected to grow 16.6% YoY and FY23 sales are expected to grow 4.6% YoY.
Image Source: Zacks Investment Research
After trending down for the last year and a half, GM looks like it may have found a floor. The stock has held a significant level of support, and looks to have formed a triple bottom, signaling what could be a major low for the stock.
Image Source: TradingView
Bottom Line
The auto industry is an incredibly challenging and competitive one that is amid a major transition. However, with improving earnings and market conditions the automotive stocks listed may present opportunities to buy unloved stocks at bargain prices.