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The Zacks Analyst Blog Highlights Tesla, BRP Group, and Dorman Products

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For Immediate Release

Chicago, IL – May 12, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla Inc. (TSLA - Free Report) , BRP Group, Inc. (DOOO - Free Report) , and Dorman Products (DORM - Free Report) .

Here are highlights from Wednesday’s Analyst Blog:

Tesla (TSLA - Free Report) Recalls 130K Cars, Halts Giga 3 Operations

Tesla Inc. has once again issued a new recall impacting nearly 130,000 vehicles. The recalled cars (consisting of 2021-2022 Model S and Model X, besides 2022 Model 3 and Model Y) were facing an overheating problem concerning the CPU of the center screen's computer. The infotainment CPU may overheat during the preparation or process of fast-charging that causes the CPU to lag or restart.

The National Highway Traffic Safety Administration has stated that an official recall is required since the glitch can affect critical functions when pre-conditioning the pack on the way to a Supercharger.

However, the fix is again an over-the-air ("OTA") software update and does not need a physical recall. The OTA software update by Tesla will improve CPU temperature management free of charge. Owners are expected to be notified by Jul 1, 2022.

Of late, Tesla has had to issue a number of recalls, majorly due to software problems, but most of them were minor issues that could be fixed by simple OTA software updates.

In January this year, the auto giant issued a massive recall of 817,000 cars in the United States over an issue with the seat belt alert, likely caused by a software error. This recall impacted vehicles belonging to the 2021-2022 Model S and Model X, the 2017-2022 Model 3, and the 2020-2022 Model Y.

Although the company has to deal with the pain that recalls entail, it points to the high level of connectivity in its vehicles and the lack of dependency on third-party dealers to service them. It is one of Tesla's biggest advantages over the rest of the industry.

In another blow, Tesla has been forced to halt most of its production at its Shanghai Giga 3 plant due to the ongoing shortage in plants needed for its electric vehicles, per media sources.

The plant intends to bring down capacity to lower than 200 vehicles on each day, far lesser than the almost 1,200 units it had been building each day since it reopened on Apr 19 after a 22-day production hiatus.

The re-imposition of lockdown in the event of a new breakout of coronavirus in Shanghai has further made it difficult for manufacturers to operate amid hard restrictions on the movement of people and materials. Aptiv, Tesla's main supplier of wire harnesses, stopped shipping from a Shanghai plant after a number of its workers were found infected.

It is not yet clear as to when the current supply challenges will be mitigated and the company can move back to its initial optimistic plans to bolster capacity at the plant.

Shares of TSLA have gained 35.7% over the past year against the industry's 2.8% decline.

Zacks Rank & Key Picks

TSLA currently carries a Zacks Rank #3 (Hold).

Better-ranked players in the auto space include BRP Group, Inc., sporting a Zacks Rank #1 (Strong Buy), and Dorman Products carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today's Zacks #1 Rank stocks here.

BRP Group has an expected earnings growth rate of 9.2% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.3% upward in the past 60 days.

BRP Group's earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 8.7% over the past year.

Dorman Products has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.7% upward in the past 60 days.

Dorman Products' earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. DORM pulled off a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 2.3% over the past year.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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