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Auto Stock Roundup: Tesla Outlines Expansion Plans, Winnebago Q3 Earnings Beat

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The auto sector saw usual developments last week but most of the companies from this space witnessed negative stock price movement.General Motors Company (GM - Free Report) disclosed its plans of opening a new supplier park at its already-existing Arlington assembly plant in Texas. Ford Motor Company (F - Free Report) reportedly announced the shifting of the production facility of its Focus small car model to China. Also, per a Bloomberg report, Tesla, Inc. (TSLA - Free Report) is close to beginning vehicle production in China.

In another development, Harley-Davidson, Inc. (HOG - Free Report) is eyeing Italian motorcycle manufacturer Ducati, per various sources.

Moreover, Winnebago Industries, Inc. (WGO - Free Report) reported better-than-expected third-quarter fiscal 2017 (ended May 27, 2017) results.

Recap of the Week’s Most Important Stories

1.    General Motors plans to open a new supplier park at its already-existing Arlington assembly plant in Texas. This new facility will support future vehicle production and recruit up to 1,250 employees. Per management, the plant will improve logistic efficiency and coordination, and create employment opportunities (read more: General Motors to Open Park in Arlington Plant, Offer Jobs).

General Motors carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

2.    Ford announced the shifting of the production facility of its Focus small car model to China. The manufactured models will be imported to the U.S. from mid-2019. This step has been taken by Ford with the aim of trimming tooling costs up to $500 million, taking advantage of low oil prices and the stable U.S.-China trade relations, despite recent tensions (read more: Ford to Shift Production Facility of Focus Cars to China).

Ford carries a Zacks Rank #3 (Hold).

3.    Tesla is close to beginning vehicle production in China. The Palo Alto, CA-based electric vehicles maker is about to enter into an agreement with the city of Shanghai. The agreement will allow the company to build facilities in Lingang development zone and access the Mainland market more vehemently.

Tesla is actively undertaking international expansion. Since 2013, the company has been selling its vehicles in a number of new markets such as Europe, China, Japan, Hong Kong, Australia, and Mexico. In fact, in 2016, Tesla’s revenue grew three times to over $1 billion. Moreover, though production in China, the largest auto market in the world, the company can avoid 25% import tariff (read more: Tesla Gearing Up for Vehicle Production in China).

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

4.    Winnebago recorded adjusted earnings of 94 cents per share in the third quarter of fiscal 2017 (ended May 27, 2017), beating the Zacks Consensus Estimate of 66 cents. In the year-ago period, earnings came in at 53 cents per share.

Revenues in the third quarter rose 75.1%to $476.4 million from $272.1 million in the prior-ago quarter. Moreover, the figure outpaced the Zacks Consensus Estimate of $443 million. The upside in the top line was driven by strong growth of the Towable business (read more: Winnebago Beats Q3 Earnings and Revenues Estimates).

Winnebago currently carries a Zacks Rank #3.

5.    Per sources, Harley-Davidson is eyeing Italian motorcycle manufacturer Ducati. The company is likely to enter the race to acquire Italy-based Ducati for a price of $1.67 billion. Bid for deal is likely to come in July.

Harley-Davidson carries a Zacks Rank #4 (Sell).

Performance

Most auto stocks declined last week. Harley-Davidson was the only stock to gain among the stocks listed below, while Advance Auto Parts, Inc. (AAP - Free Report) registered the maximum decline.

In the last six months, Tesla was the only gainer, while the other stocks on the list saw a decline.

 

Company

Last 1-Week Period

Last 6 Months

GM

-1.4%

-4.4%

F

-1.6%

-11.4%

TSLA

-1.1%

75.9%

TM

-2.0%

-13.5%

HMC

-1.7%

-8.7%

HOG

4.9%

-3.8%

AAP

-8.0%

-29.8%

AZO

-5.6%

-27.8%

 

What’s Next in the Auto Space?

In the first week of July, automakers are expected to report their U.S. sales data for June and first-half 2017.

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