We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Auto Roundup: F's Bold Rejig & STLA's Dare Forward 2030 Plan Steal Spotlight
Read MoreHide Full Article
Last week, a number of auto giants unveiled February U.S. sales data. The seasonally adjusted U.S. auto sales rate dropped to 14.15 million last month from January’s 15.2 million, per Motor Intelligence. Among the major auto giants that continue to report monthly sales data, most of the companies witnessed a year-over-year decline in vehicle sales. U.S. auto giant Ford’s (F - Free Report) sales cratered around 20%. Sales of its most popular F-Series pickup line tailed of 30% as most of its nameplates posted year-over-year declines. The top two Japanese auto biggies also witnessed double digit year-over-year deterioration in US auto sales.
Quoting Thomas King, president of the data and analytics division at J.D. Power, “With retail inventory on pace to finish a fourth consecutive month below 900,000 units and ninth consecutive month below one million units, the new-vehicle supply situation is not displaying signs of near-term improvement.”
Meanwhile, Ford and Stellantis (STLA - Free Report) made the most noise with their ambitious electrification plans.
In one of the boldest steps under the leadership of CEO Jim Farley, Fordis separating its EV business from its legacy ICE business to bolster position in the e-mobility domain. It should be noted that Ford is not spinning off its EV business into a separate public company. It’s just splitting the EV business into a separate unit within the company.
Stellantis, at one of its strategy meetings, launched the Dare Forward 2030 plan that will aid its transition to a carbon net-zero entity by 2038, with a 50% reduction by 2030. The Dare Forward 2030 promises to make the company a championed player in the domain of net-zero emission vehicles by driving innovation and employee engagement.
Then, there was AutoZone’s (AZO - Free Report) second-quarter fiscal 2022 earnings results, wherein the company delivered a comprehensive beat. Auto retailer Penske Automotive (PAG - Free Report) made the headlines with the acquisition of TEAM Truck Centres.
Inside the Headlines
1. Ford announced the decision to reorganize its auto operations into two separate divisions — one focused solely on EVs (this unit will be called Ford Model e) and another on its internal combustion engine (ICE) business (dubbed as Ford Blue). Ford Model e will focus on EVs, advanced technologies and several related aspects to support the electrification plans.Farley would double up as president of the Ford Model e unit.Ford Blue will focus on the firm’s legacy gas-powered business and will include the company’s iconic models. This division will be led by Kumar Galhotra.
With the Model e division, Ford is targeting annual production of 2 million EVs by 2026, thereby accounting for around 33% of the company’s total volumes. By 2030, Ford expects 50% of its global volumes to come from electric sales — higher than its previous target of 40%. The company intends to spend $5 billion on EVs this year, which calls for a two-fold increase from the 2021 levels. Ford targets to spend $50 billion on EVs through 2026, up from the previously announced $30 billion through 2025.
2. Stellantis laid out bold electrification plans to churn out big gains. The auto giant aims to double net revenues to $335 billion annually by 2030 and maintain double-digit profit margins as it looks to ramp up efforts to bring electrified versions of its cars.To gain leadership in de-carbonization, the company aims for 100% of vehicle sales in Europe and 50% of sales in the United States to be EVs by the end of this decade. It plans to have more than 75 BEVs and reach global annual BEV sales of 5 million vehicles by 2030.
Under the Dare Forward strategy, Stellantis aims to increase its planned battery capacity by 140 gigawatt-hours to nearly 400 GWh and expand its hydrogen fuel cell technology to large vans in 2024. STLA unveiled its first-ever fully electric Jeep SUV, which is expected to be launched in early 2023, two years earlier than initially predicted. The new Ram 1500 BEV pickup truck, arriving in 2024, was also previewed.
3. AutoZone reported earnings of $22.3 per share in second-quarter fiscal 2022, surging 49.4% from the prior-year figure of $14.93. The bottom line surpassed the Zacks Consensus Estimate of $17.80. Robust comparable sales growth led to this outperformance. Domestic same-store sales rose 13.8%, comfortably beating the Zacks Consensus Estimate of 7.62%. Net sales grew 15.8% to $3,369.8 million. The top line beat the Zacks Consensus Estimate of $3,157.1 million.
AutoZone had cash and cash equivalents of $239.4 million as of Feb 12, 2022, down from $1,026.2 million on Feb 13, 2021. Total debt amounted to $5,840.9 million as of Feb 12, 2022, marking an increase from $5,516.4 million on Feb 13, 2021. At the end of the quarter, AZO had $958 million remaining under its current share repurchase authorization. The total store count was 6,815 as of Feb 12, 2022.
4. Penske announced that it acquired TEAM Truck Centres, a retailer of medium and heavy-duty Freightliner and Western Star commercial trucks. The buyout is expected to add around $150 million to Penske’s annualized revenues and enhance production scale within the company’s wholly-owned Premier Truck Group subsidiary.
Ontario-based TEAM, with a long-standing repute, is one of the largest and most-well-respected commercial truck dealerships in Canada. It contributes four full-service dealerships to Premier Truck Group's existing operations in Ontario (Cambridge, London, Sarnia, Windsor), bringing the commercial truck dealership location count to 11 in the country. PAG is confident that the new sites will better equip them to remotely serve trucks through the TEAM Truck Centres mobile product support vehicles.
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
What’s Next in the Auto Space?
Industry watchers will track China vehicle sales data for February 2022, which is likely to be released by the China Association of Automobile Manufacturers this week. Also, stay tuned for updates on how automakers continue to make changes in business operations amid Russia-Ukraine crisis.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Auto Roundup: F's Bold Rejig & STLA's Dare Forward 2030 Plan Steal Spotlight
Last week, a number of auto giants unveiled February U.S. sales data. The seasonally adjusted U.S. auto sales rate dropped to 14.15 million last month from January’s 15.2 million, per Motor Intelligence. Among the major auto giants that continue to report monthly sales data, most of the companies witnessed a year-over-year decline in vehicle sales. U.S. auto giant Ford’s (F - Free Report) sales cratered around 20%. Sales of its most popular F-Series pickup line tailed of 30% as most of its nameplates posted year-over-year declines. The top two Japanese auto biggies also witnessed double digit year-over-year deterioration in US auto sales.
Quoting Thomas King, president of the data and analytics division at J.D. Power, “With retail inventory on pace to finish a fourth consecutive month below 900,000 units and ninth consecutive month below one million units, the new-vehicle supply situation is not displaying signs of near-term improvement.”
Meanwhile, Ford and Stellantis (STLA - Free Report) made the most noise with their ambitious electrification plans.
In one of the boldest steps under the leadership of CEO Jim Farley, Fordis separating its EV business from its legacy ICE business to bolster position in the e-mobility domain. It should be noted that Ford is not spinning off its EV business into a separate public company. It’s just splitting the EV business into a separate unit within the company.
Stellantis, at one of its strategy meetings, launched the Dare Forward 2030 plan that will aid its transition to a carbon net-zero entity by 2038, with a 50% reduction by 2030. The Dare Forward 2030 promises to make the company a championed player in the domain of net-zero emission vehicles by driving innovation and employee engagement.
Then, there was AutoZone’s (AZO - Free Report) second-quarter fiscal 2022 earnings results, wherein the company delivered a comprehensive beat. Auto retailer Penske Automotive (PAG - Free Report) made the headlines with the acquisition of TEAM Truck Centres.
Inside the Headlines
1. Ford announced the decision to reorganize its auto operations into two separate divisions — one focused solely on EVs (this unit will be called Ford Model e) and another on its internal combustion engine (ICE) business (dubbed as Ford Blue). Ford Model e will focus on EVs, advanced technologies and several related aspects to support the electrification plans.Farley would double up as president of the Ford Model e unit.Ford Blue will focus on the firm’s legacy gas-powered business and will include the company’s iconic models. This division will be led by Kumar Galhotra.
With the Model e division, Ford is targeting annual production of 2 million EVs by 2026, thereby accounting for around 33% of the company’s total volumes. By 2030, Ford expects 50% of its global volumes to come from electric sales — higher than its previous target of 40%. The company intends to spend $5 billion on EVs this year, which calls for a two-fold increase from the 2021 levels. Ford targets to spend $50 billion on EVs through 2026, up from the previously announced $30 billion through 2025.
2. Stellantis laid out bold electrification plans to churn out big gains. The auto giant aims to double net revenues to $335 billion annually by 2030 and maintain double-digit profit margins as it looks to ramp up efforts to bring electrified versions of its cars.To gain leadership in de-carbonization, the company aims for 100% of vehicle sales in Europe and 50% of sales in the United States to be EVs by the end of this decade. It plans to have more than 75 BEVs and reach global annual BEV sales of 5 million vehicles by 2030.
Under the Dare Forward strategy, Stellantis aims to increase its planned battery capacity by 140 gigawatt-hours to nearly 400 GWh and expand its hydrogen fuel cell technology to large vans in 2024. STLA unveiled its first-ever fully electric Jeep SUV, which is expected to be launched in early 2023, two years earlier than initially predicted. The new Ram 1500 BEV pickup truck, arriving in 2024, was also previewed.
3. AutoZone reported earnings of $22.3 per share in second-quarter fiscal 2022, surging 49.4% from the prior-year figure of $14.93. The bottom line surpassed the Zacks Consensus Estimate of $17.80. Robust comparable sales growth led to this outperformance. Domestic same-store sales rose 13.8%, comfortably beating the Zacks Consensus Estimate of 7.62%. Net sales grew 15.8% to $3,369.8 million. The top line beat the Zacks Consensus Estimate of $3,157.1 million.
AutoZone had cash and cash equivalents of $239.4 million as of Feb 12, 2022, down from $1,026.2 million on Feb 13, 2021. Total debt amounted to $5,840.9 million as of Feb 12, 2022, marking an increase from $5,516.4 million on Feb 13, 2021. At the end of the quarter, AZO had $958 million remaining under its current share repurchase authorization. The total store count was 6,815 as of Feb 12, 2022.
4. Penske announced that it acquired TEAM Truck Centres, a retailer of medium and heavy-duty Freightliner and Western Star commercial trucks. The buyout is expected to add around $150 million to Penske’s annualized revenues and enhance production scale within the company’s wholly-owned Premier Truck Group subsidiary.
Ontario-based TEAM, with a long-standing repute, is one of the largest and most-well-respected commercial truck dealerships in Canada. It contributes four full-service dealerships to Premier Truck Group's existing operations in Ontario (Cambridge, London, Sarnia, Windsor), bringing the commercial truck dealership location count to 11 in the country. PAG is confident that the new sites will better equip them to remotely serve trucks through the TEAM Truck Centres mobile product support vehicles.
Penske currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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
What’s Next in the Auto Space?
Industry watchers will track China vehicle sales data for February 2022, which is likely to be released by the China Association of Automobile Manufacturers this week. Also, stay tuned for updates on how automakers continue to make changes in business operations amid Russia-Ukraine crisis.