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Auto Stock Roundup: General Motors-Unifor Deal, Ford's EV Investment & More

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Last week, China Association of Automobile Manufacturers (“CAAM”) disclosed vehicle sales data for the month of September.Auto sales in the country climbed 12.5% year over year to 2.6 million units for September, marking the seventh straight month of year-over-year growth. While China is spearheading the global auto industry’s revival, total vehicle sales through the January-October 2020 period is still below the pre-COVID-19 levels and declined 4.7% from the year-ago comparable period. Per CAAM, sales of new energy vehicles rose 105% year over year in October, marking the fourth straight month of sales increase after snapping a year-long slump in July.

(Read the Last Auto Stock Roundup here)

Recap of the Week’s Most Important Stories

Advance Auto Parts (AAP - Free Report) reported adjusted earnings of $2.81 per share in third-quarter 2020 (ended Oct 3, 2020), reflecting a substantial increase of 33.8% from the prior-year figure. The reported figure also beat the Zacks Consensus Estimate of $2.63. The company’s generated net revenues of $2,541.9 millionsurpassed the Zacks Consensus Estimate of $2,478 million. Additionally, the revenue figure increased 9.9% from the year-ago quarter reported figure. During the third quarter, comparable store sales not only increased 10.2% year on year but also topped the consensus mark of 5.88%. As of Oct 3, 2020, the company operated 4,811 stores and 168 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands.

Ford (F - Free Report)  announced the decision to manufacture its all-new E-Transit van at the company’s Kansas City Assembly Plant. It is investing roughly $100 million in the Kansas City plant. The all-electric E-Transit will enter the market in 2022.The decision is part of the firm’s investment plans of more than $3.2 billion in its North American manufacturing facilities to produce a line-up of new electric vehicles (EVs) for commercial and retail customers. Notably, Ford will invest more than $11.5 billion globally in electrification through 2022.

General Motors (GM - Free Report)  recently announced that its workers in Canada, represented by Unifor, have agreed to a new three-year collective agreement between the union body and the company.The deal encompasses General Motors’ investment to the tune of $1.3 billion, creating 1,700 jobs in the Oshawa plant. More than $109 million will be invested to facilitate V-8 engine and transmission production in St. Catharines.The Oshawa plant will resume production of both light and heavy-duty trucks in 2022, and St. Catharines will manufacture engines for those pick-ups.Unifor’s deal with General Motors marks the third consecutive win for the union body after it struck similar deals with Ford and Fiat Chrysler . General Motors currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Meritor, Inc. (MTOR - Free Report) posted adjusted diluted earnings per share of 15 cents in fourth-quarter fiscal 2020 (ended Sep 30, 2020), handily beating the Zacks Consensus Estimate of 5 cents.The bottom line, however, declined from the year-ago adjusted earnings of 83 cents a share. Sales slipped 26% year over year to $758 million in the fiscal fourth quarter. Nonetheless, the reported figure surpassed the Zacks Consensus Estimate of $728 million.For fiscal 2021, Meritor projects sales in the range of $3.1billion to $3.35 billion. Cash flow from operations and free cash flow are anticipated in the range of $145-$185 million and $60-$100 million, respectively.

Westport Fuel Systems Inc. (WPRT - Free Report) reported earnings per share of 1 cent in third-quarter 2020, against the Zacks Consensus Estimate of a loss of 4 cents. However, the reported figure was lower than earnings of 4 cents per share in the year-ago period.Westport Fuel registered revenues of $65.4 million in the third quarter, down 13% year over year.The companyhad cash and cash equivalents of $46.3 million as of Sep 30, 2020, down from $46 million as of Dec 31, 2019. Total debt amounted to $76 million as of Sep 30, 2020, compared with the $49 million as of Dec 31, 2019.

Price Performance

The following table shows the price movement of some of the major auto players over the past week and six-month period.

In the past six months, all stocks have increased, with Tesla (TSLA - Free Report) being the maximum gainer. Over the past week, all stocks have moved up apart from Tesla and Advance Auto Parts.

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