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Auto Stock Roundup: SAH's RFJ Auto Buyout Deal, AZO's Q4 Earnings Beat & More
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Last week, the European Automobile Manufacturers Association (“ACEA”) released data for commercial car registrations made in July and August 2021. New commercial vehicle registrations in Europe witnessed a year-over-year decline of 11.9% and 5.4% in July and August, respectively, primarily due to lower demand for vans. Snapping five months of accelerated growth, registrations of vans in the European Union (EU) slid 15.7% and 8.2% in July and August, respectively, with sales in all major markets declining significantly in both the months. Nonetheless, over the first eight months of 2021, demand for new commercial vehicles in the EU grew 24% from the corresponding period of 2020, with each of the four key markets posting double-digit gains. While Italy performed the best with a sales surge of 35.4%, France, Spain, and Germany witnessed growth of 22.4%, 16%, and 12.5%, respectively.
Last Week’s Top Stories
Sonic Automotive (SAH - Free Report) inked a $700-million deal to acquire one of the notable U.S. dealership groups, RFJ Auto Partners. The acquisition seeks to catapult Sonic, which presently carries a Zacks Rank #2 (Buy), into the top-five biggest dealership groups (in terms of revenues) in the United States. RFJ Auto will add six new states (Idaho, Indiana, Missouri, Montana, New Mexico, and Washington) and five brands (Chrysler, Dodge, Jeep, Ram, and Mazda) to Sonic’s foothold and portfolio. Importantly, the deal is expected to add $3.2 billion to Sonic’s annual revenues. The transaction, which will be funded by a mix of cash and debt, is in sync with Sonic’s commitment to optimize its franchised dealership business, both through organic growth initiatives and strategic acquisitions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AutoZone, Inc. (AZO - Free Report) reported earnings of $35.72 per share for fourth-quarter fiscal 2021 (ended Aug 28, 2021), increasing from the prior-year figure of $30.93 and beating the Zacks Consensus Estimate of $30.20. Net sales grew 8.1% year over year to $4,913.5 million and topped the Zacks Consensus Estimate of $4,538 million. The auto parts retailer exited the quarter with 6,767 stores. During the quarter under review, it repurchased 592,000 shares for $900 million and has shares worth $417.6 remaining in the current buyback authorization. AutoZone had cash/cash equivalents and total debt of $1,171.3 million and $5,269.8 million, respectively, as of Aug 28, 2021.
AutoNation (AN - Free Report) named Mike Manley as its CEO, replacing Mike Jackson, who is retiring after managing the company for the greater part of the last 22 years. Manley, who is presently Stellantis' head of Americas, will take over from Nov 1, 2021. Manley has been behind the successful turnaround of the Jeep subsidiary, which was an anchor of FCA profits. He will retain ties with Stellantis — formed when FCA and PSA merged in January this year — as a board member. After Manley’s stepdown, Mark Stewart (CEO, North America) and Antonio Filosa (COO of Latin America) will report directly to Stellantis’ CEO Carlos Tavares.
General Motors (GM - Free Report) inked an agreement with Hertz to help provide additional loaner cars to dealerships amid the global shortage of microchips. Hertz will primarily pivot on furnishing loaner vehicles to Chevy Bolt EV customers. As we know, General Motors is grappling with massive battery recalls and recently extended an existing recall for Chevy Bolt EV and Chevy Bolt EUV to all models and model years, including the revamped 2022 Chevy Bolt EV and all-new 2022 Chevy Bolt EUV. It should be noted that the rental car giant Hertz will provide additional loaner vehicles at the automaker’s current rate as an add-on to the GM Dealer Courtesy Transportation Program.
Allison Transmission (ALSN - Free Report) announced that its 3414 Regional Haul Series (RHS) — an upgraded variant of the firm’s proven 3000 Series fully automatic transmission — has been deployed into Daimler’s Class 8 Freightliner Cascadia Day Cab models. The first Freightliner Cascadias, equipped with the 3414 RHS, will begin production in January 2022. The 3414 RHS offers up to 8% fuel economy efficiency compared to the 3000 Highway Series and provides 25% quicker acceleration over automated manual transmissions. Allison’s latest development in regional haul trucking provides Daimler’s Freightliner customers with an efficient solution that enhances the payload, performance, fuel efficiency and driver comfort.
Price Performance
The following table shows the price movement of some of the major auto players over the past week and six-month period.
Image Source: Zacks Investment Research
In the past six months, all stocks but General Motors have registered gains. In the past week, all stocks but Honda increased, with AutoZone being the top performer.
What’s Next in the Auto Space?
Car enthusiasts will be keeping a close watch on September/third-quarter 2021 U.S. car sales, which will be coming out later this week. Investors are awaiting the quarterly results of recreational vehicle maker Thor Industries (THO - Free Report) and automotive retailer CarMax (KMX - Free Report) , which are scheduled to report this week. Also, stay tuned for coronavirus and chip crunch-related disruptions in the auto sector.
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Auto Stock Roundup: SAH's RFJ Auto Buyout Deal, AZO's Q4 Earnings Beat & More
Last week, the European Automobile Manufacturers Association (“ACEA”) released data for commercial car registrations made in July and August 2021. New commercial vehicle registrations in Europe witnessed a year-over-year decline of 11.9% and 5.4% in July and August, respectively, primarily due to lower demand for vans. Snapping five months of accelerated growth, registrations of vans in the European Union (EU) slid 15.7% and 8.2% in July and August, respectively, with sales in all major markets declining significantly in both the months. Nonetheless, over the first eight months of 2021, demand for new commercial vehicles in the EU grew 24% from the corresponding period of 2020, with each of the four key markets posting double-digit gains. While Italy performed the best with a sales surge of 35.4%, France, Spain, and Germany witnessed growth of 22.4%, 16%, and 12.5%, respectively.
Last Week’s Top Stories
Sonic Automotive (SAH - Free Report) inked a $700-million deal to acquire one of the notable U.S. dealership groups, RFJ Auto Partners. The acquisition seeks to catapult Sonic, which presently carries a Zacks Rank #2 (Buy), into the top-five biggest dealership groups (in terms of revenues) in the United States. RFJ Auto will add six new states (Idaho, Indiana, Missouri, Montana, New Mexico, and Washington) and five brands (Chrysler, Dodge, Jeep, Ram, and Mazda) to Sonic’s foothold and portfolio. Importantly, the deal is expected to add $3.2 billion to Sonic’s annual revenues. The transaction, which will be funded by a mix of cash and debt, is in sync with Sonic’s commitment to optimize its franchised dealership business, both through organic growth initiatives and strategic acquisitions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AutoZone, Inc. (AZO - Free Report) reported earnings of $35.72 per share for fourth-quarter fiscal 2021 (ended Aug 28, 2021), increasing from the prior-year figure of $30.93 and beating the Zacks Consensus Estimate of $30.20. Net sales grew 8.1% year over year to $4,913.5 million and topped the Zacks Consensus Estimate of $4,538 million. The auto parts retailer exited the quarter with 6,767 stores. During the quarter under review, it repurchased 592,000 shares for $900 million and has shares worth $417.6 remaining in the current buyback authorization. AutoZone had cash/cash equivalents and total debt of $1,171.3 million and $5,269.8 million, respectively, as of Aug 28, 2021.
AutoNation (AN - Free Report) named Mike Manley as its CEO, replacing Mike Jackson, who is retiring after managing the company for the greater part of the last 22 years. Manley, who is presently Stellantis' head of Americas, will take over from Nov 1, 2021. Manley has been behind the successful turnaround of the Jeep subsidiary, which was an anchor of FCA profits. He will retain ties with Stellantis — formed when FCA and PSA merged in January this year — as a board member. After Manley’s stepdown, Mark Stewart (CEO, North America) and Antonio Filosa (COO of Latin America) will report directly to Stellantis’ CEO Carlos Tavares.
General Motors (GM - Free Report) inked an agreement with Hertz to help provide additional loaner cars to dealerships amid the global shortage of microchips. Hertz will primarily pivot on furnishing loaner vehicles to Chevy Bolt EV customers. As we know, General Motors is grappling with massive battery recalls and recently extended an existing recall for Chevy Bolt EV and Chevy Bolt EUV to all models and model years, including the revamped 2022 Chevy Bolt EV and all-new 2022 Chevy Bolt EUV. It should be noted that the rental car giant Hertz will provide additional loaner vehicles at the automaker’s current rate as an add-on to the GM Dealer Courtesy Transportation Program.
Allison Transmission (ALSN - Free Report) announced that its 3414 Regional Haul Series (RHS) — an upgraded variant of the firm’s proven 3000 Series fully automatic transmission — has been deployed into Daimler’s Class 8 Freightliner Cascadia Day Cab models. The first Freightliner Cascadias, equipped with the 3414 RHS, will begin production in January 2022. The 3414 RHS offers up to 8% fuel economy efficiency compared to the 3000 Highway Series and provides 25% quicker acceleration over automated manual transmissions. Allison’s latest development in regional haul trucking provides Daimler’s Freightliner customers with an efficient solution that enhances the payload, performance, fuel efficiency and driver comfort.
Price Performance
The following table shows the price movement of some of the major auto players over the past week and six-month period.
Image Source: Zacks Investment Research
In the past six months, all stocks but General Motors have registered gains. In the past week, all stocks but Honda increased, with AutoZone being the top performer.
What’s Next in the Auto Space?
Car enthusiasts will be keeping a close watch on September/third-quarter 2021 U.S. car sales, which will be coming out later this week. Investors are awaiting the quarterly results of recreational vehicle maker Thor Industries (THO - Free Report) and automotive retailer CarMax (KMX - Free Report) , which are scheduled to report this week. Also, stay tuned for coronavirus and chip crunch-related disruptions in the auto sector.