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Auto Stock Roundup: Harley-Davidson Q1 Earnings Beat, GM, Honda to Launch Electric Vehicles in China

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Last week recorded a mixed performance by automakers. Harley-Davidson, Inc. (HOG - Free Report) reported first-quarter 2017 earnings, which beat the Zacks Consensus Estimate, but fell year over year.

Tesla, Inc. (TSLA - Free Report) lowered the price of its base Model S after discontinuing the previous base model. Ford Motor Company (F - Free Report) saw higher year over year sales in Europe in Mar 2017.

General Motors Company (GM - Free Report) and Honda Motor Company, Ltd. (HMC - Free Report) are working on launching electric vehicles in China. This comes in the wake of the Chinese government’s expectations to toughen regulations for non-electric cars.

(Read the previous roundup here: Auto Stock Roundup for Apr 13, 2017)

Recap of the Week’s Most Important Stories

1. Harley-Davidson reported earnings of $1.05 per share in the first quarter of 2017, beating the Zacks Consensus Estimate of 99 cents. However, earnings were lower than $1.36 recorded in the year-ago quarter. Operating revenues (excluding financial services) declined 15.8% to $1.33 billion in the quarter, missing the Zacks Consensus Estimate of $1.35 billion.

The company logged consolidated revenues of $1.5 billion, which deteriorated from $1.75 billion posted a year ago. In the second quarter of 2017, Harley-Davidson expects to ship 80,000 to 85,000 motorcycles, compared with 88,160 motorcycles shipped in the year-ago period. (Read More: Harley-Davidson Q1 Earnings Beat Estimates, Fall Y/Y)

Harley-Davidson carries a Zacks Rank #3 (Hold).

2. Tesla has lowered the price of its Model S after discontinuing its previously available cheapest variant. The company has decreased the price of the 75 kWh Model S by $5,000, giving it a starting price of $69,500. The decrease is expected to maximize Model S sales before the upcoming low-cost Model 3.

Meanwhile, owners of Tesla cars have filed a lawsuit against the company for knowingly selling almost 50,000 cars with nonfunctional Enhanced Autopilot AP2.0 software. The vehicles behave erratically, proving dangerous for the drivers. Per the lawsuit, damages for affected vehicles will include the cost of the standard safety features that are not available in these cars, along with $5,000 premium cost of the nonfunctional Enhanced Autopilot feature that many customers purchased.

Tesla carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

3. General Motors announced its plan to launch a gasoline-electric hybrid version of its Chevrolet Volt in China. The vehicle, Velite 5, will be manufactured by the joint venture between General Motor and state-owned automaker, Shanghai Automotive Industries Corp. The car is expected to travel up to 72 miles on a single charge, with an added gasoline engine extending that to 480 miles. The vehicle’s price is expected to start at 265,800 yuan ($38,600).

General Motors also carries a Zacks Rank #3.

4. On a similar note, Honda is working on the launch of its all-electric battery vehicle in China. The company has decided to accelerate its ramp up of the car so that it is available in showrooms before the end of 2018. Other plug-in hybrid models are likely to follow this launch but the details for the same have not been provided yet.

Honda carries a Zacks Rank #3.

5. Ford saw 14% higher sales in Mar 2017 from Mar 2016, selling 199,900 units in its Euro 20 markets during the period. Meanwhile, sales in the total 50 European markets of the company rose 13% year over year to 215,900 units. Ford’s market share in Europe also increased 0.3% from Mar 2016 to 8.9%.

Ford carries a Zacks Rank #5 (Strong Sell).

Performance

Auto stocks recorded a mixed performance over the last week. Harley-Davidson lost the most among the stocks listed below, while Tesla was the largest gainer.

In the last six months, Tesla was the biggest gainer, while AutoZone, Inc. (AZO - Free Report) and Ford were the worst performers.

 

Company

Last 1-Week Period

Last 6 Months

GM

-0.4%

+6.4%

F

-0.4%

-6.5%

TSLA

+2.9%

+53.5%

TM

-0.8%

-9.9%

HMC

-1.3%

-5.0%

HOG

-7.6%

+1.4%

AAP

+0.5%

+0.8%

AZO

+0.6%

-6.5%

Auto-Tires-Trucks Sector 5YR % Return

 

Auto-Tires-Trucks Sector 5YR % Return

What’s Next in the Auto Space?

A number of automakers are expected to report first-quarter 2017 earnings in the coming week.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

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