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Among the broader auto industry, General Motors (GM - Free Report) ) and Ford (F - Free Report) ) stock remain attractive along with automotive parts distributor Genuine Parts (GPC - Free Report) ).
All three companies are well-positioned within the auto space and there could be more upside ahead as we progress through 2023. Notably, General Motors, Ford, and Genuine Parts stocks are off to strong starts this month and have outperformed the benchmark.
Image Source: Zacks Investment Research
Industry Position & Highlights
Most automakers are now focused on expansion into electric vehicles and while Tesla (TSLA - Free Report) ) gets most of the attention General Motors and Ford are well-positioned. While at a distance to Tesla’s 422,875 EVs delivered during the first quarter, General Motors and Ford are second and third in the domestic market respectively.
General Motors sold 20,670 EVs during Q1 which skyrocketed 4,423% from 457 EVs sold in the prior year quarter. As for Ford, its 10,866 EVs sold during Q1 climbed 41% year over year. Furthermore, General Motors is still the largest U.S. automaker in terms of total sales with Ford holding the third spot behind Toyota Motors (TM - Free Report) ).
With respect to Genuine Parts, the company remains the largest automobile parts supplier in the United States. Genuine Parts’ recent growth has been very impressive after posting record sales of $5.76 billion during the first quarter.
Image Source: Zacks Investment Research
Earnings Estimate Revisions
What makes General Motors, Ford, and Genuine Parts stocks more attractive since their favorable first-quarter reports is the trend in earnings estimate revisions. Earnings estimates have trended higher with all three companies most recently beating their quarterly top and bottom line expectations.
GM Earnings Estimates: General Motors’ fiscal 2023 EPS estimates have remained 9% higher over the last 60 days with FY24 earnings estimates rising 8%.
Image Source: Zacks Investment Research
Ford Earnings Estimates: Ford’s fiscal 2023 EPS estimates have jumped 16% in the last two months and FY24 earnings estimates are up 6%.
Image Source: Zacks Investment Research
GPC Earrings Estimates: Genuine Parts earnings estimates for fiscal 2023 have increased by 1% in the last 60 days with FY24 EPS estimates up 2%.
Image Source: Zacks Investment Research
Supportive P/E Valuations
With rising earnings estimates indicating there could be more upside in these auto stocks their P/E valuations appear to support this as well.
Regarding General Motors and Ford, both trade intriguingly below the S&P 500’s 19.8X forward earnings and nicely beneath their industry average of 10.6X.
To that note, General Motors trades at $35 a share and at a 5.4X forward earnings multiple. This is 76% below its decade high of 22.8X while offering a slight discount to the median of 6.6X. Trading at $13 a share, Ford stock trades at 7.8X forward earnings which is 52% below its own decade-long high of 16.5X and roughly on par with the median of 7.5X.
Image Source: Zacks Investment Research
Pivoting to Genuine Parts, shares of GPC trade at $154 and 16.9X forward earnings which is attractively beneath the benchmark. Genuine Parts stock also trades virtually on par with its industry average of 16.9X and 28% below its decade high of 23.4X while offering a 10% discount to the median of 18.9X.
Image Source: Zacks Investment Research
Takeaway
These auto stocks could continue to rise this month as positive earnings estimate revisions have started to reconfirm they are undervalued considering their low P/E valuations. At the moment General Motors and Ford stock both land a Zacks Rank #1 (Strong Buy) with Genuine Parts landing a Zacks Rank #2 (Buy).
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3 Auto Stocks to Buy in June
Among the broader auto industry, General Motors (GM - Free Report) ) and Ford (F - Free Report) ) stock remain attractive along with automotive parts distributor Genuine Parts (GPC - Free Report) ).
All three companies are well-positioned within the auto space and there could be more upside ahead as we progress through 2023. Notably, General Motors, Ford, and Genuine Parts stocks are off to strong starts this month and have outperformed the benchmark.
Image Source: Zacks Investment Research
Industry Position & Highlights
Most automakers are now focused on expansion into electric vehicles and while Tesla (TSLA - Free Report) ) gets most of the attention General Motors and Ford are well-positioned. While at a distance to Tesla’s 422,875 EVs delivered during the first quarter, General Motors and Ford are second and third in the domestic market respectively.
General Motors sold 20,670 EVs during Q1 which skyrocketed 4,423% from 457 EVs sold in the prior year quarter. As for Ford, its 10,866 EVs sold during Q1 climbed 41% year over year. Furthermore, General Motors is still the largest U.S. automaker in terms of total sales with Ford holding the third spot behind Toyota Motors (TM - Free Report) ).
With respect to Genuine Parts, the company remains the largest automobile parts supplier in the United States. Genuine Parts’ recent growth has been very impressive after posting record sales of $5.76 billion during the first quarter.
Image Source: Zacks Investment Research
Earnings Estimate Revisions
What makes General Motors, Ford, and Genuine Parts stocks more attractive since their favorable first-quarter reports is the trend in earnings estimate revisions. Earnings estimates have trended higher with all three companies most recently beating their quarterly top and bottom line expectations.
GM Earnings Estimates: General Motors’ fiscal 2023 EPS estimates have remained 9% higher over the last 60 days with FY24 earnings estimates rising 8%.
Image Source: Zacks Investment Research
Ford Earnings Estimates: Ford’s fiscal 2023 EPS estimates have jumped 16% in the last two months and FY24 earnings estimates are up 6%.
Image Source: Zacks Investment Research
GPC Earrings Estimates: Genuine Parts earnings estimates for fiscal 2023 have increased by 1% in the last 60 days with FY24 EPS estimates up 2%.
Image Source: Zacks Investment Research
Supportive P/E Valuations
With rising earnings estimates indicating there could be more upside in these auto stocks their P/E valuations appear to support this as well.
Regarding General Motors and Ford, both trade intriguingly below the S&P 500’s 19.8X forward earnings and nicely beneath their industry average of 10.6X.
To that note, General Motors trades at $35 a share and at a 5.4X forward earnings multiple. This is 76% below its decade high of 22.8X while offering a slight discount to the median of 6.6X. Trading at $13 a share, Ford stock trades at 7.8X forward earnings which is 52% below its own decade-long high of 16.5X and roughly on par with the median of 7.5X.
Image Source: Zacks Investment Research
Pivoting to Genuine Parts, shares of GPC trade at $154 and 16.9X forward earnings which is attractively beneath the benchmark. Genuine Parts stock also trades virtually on par with its industry average of 16.9X and 28% below its decade high of 23.4X while offering a 10% discount to the median of 18.9X.
Image Source: Zacks Investment Research
Takeaway
These auto stocks could continue to rise this month as positive earnings estimate revisions have started to reconfirm they are undervalued considering their low P/E valuations. At the moment General Motors and Ford stock both land a Zacks Rank #1 (Strong Buy) with Genuine Parts landing a Zacks Rank #2 (Buy).