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Auto Stock Roundup: General Motors-Unifor Deal, Ford's EV Investment & More

Rimmi Singhi
·5 min read

Last week, China Association of Automobile Manufacturers (“CAAM”) disclosed vehicle sales data for the month of September.Auto sales in the country climbed 12.5% year over year to 2.6 million units for September, marking the seventh straight month of year-over-year growth. While China is spearheading the global auto industry’s revival, total vehicle sales through the January-October 2020 period is still below the pre-COVID-19 levels and declined 4.7% from the year-ago comparable period. Per CAAM, sales of new energy vehicles rose 105% year over year in October, marking the fourth straight month of sales increase after snapping a year-long slump in July.

(Read the Last Auto Stock Roundup here)

Recap of the Week’s Most Important Stories

Advance Auto Parts AAP reported adjusted earnings of $2.81 per share in third-quarter 2020 (ended Oct 3, 2020), reflecting a substantial increase of 33.8% from the prior-year figure. The reported figure also beat the Zacks Consensus Estimate of $2.63. The company’s generated net revenues of $2,541.9 millionsurpassed the Zacks Consensus Estimate of $2,478 million. Additionally, the revenue figure increased 9.9% from the year-ago quarter reported figure. During the third quarter, comparable store sales not only increased 10.2% year on year but also topped the consensus mark of 5.88%. As of Oct 3, 2020, the company operated 4,811 stores and 168 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands.

Ford F announced the decision to manufacture its all-new E-Transit van at the company’s Kansas City Assembly Plant. It is investing roughly $100 million in the Kansas City plant. The all-electric E-Transit will enter the market in 2022.The decision is part of the firm’s investment plans of more than $3.2 billion in its North American manufacturing facilities to produce a line-up of new electric vehicles (EVs) for commercial and retail customers. Notably, Ford will invest more than $11.5 billion globally in electrification through 2022.

General Motors GM recently announced that its workers in Canada, represented by Unifor, have agreed to a new three-year collective agreement between the union body and the company.The deal encompasses General Motors’ investment to the tune of $1.3 billion, creating 1,700 jobs in the Oshawa plant. More than $109 million will be invested to facilitate V-8 engine and transmission production in St. Catharines.The Oshawa plant will resume production of both light and heavy-duty trucks in 2022, and St. Catharines will manufacture engines for those pick-ups.Unifor’s deal with General Motors marks the third consecutive win for the union body after it struck similar deals with Ford and Fiat Chrysler FCAU. General Motors currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Meritor, Inc. MTOR posted adjusted diluted earnings per share of 15 cents in fourth-quarter fiscal 2020 (ended Sep 30, 2020), handily beating the Zacks Consensus Estimate of 5 cents.The bottom line, however, declined from the year-ago adjusted earnings of 83 cents a share. Sales slipped 26% year over year to $758 million in the fiscal fourth quarter. Nonetheless, the reported figure surpassed the Zacks Consensus Estimate of $728 million.For fiscal 2021, Meritor projects sales in the range of $3.1billion to $3.35 billion. Cash flow from operations and free cash flow are anticipated in the range of $145-$185 million and $60-$100 million, respectively.

Westport Fuel Systems Inc. WPRT reported earnings per share of 1 cent in third-quarter 2020, against the Zacks Consensus Estimate of a loss of 4 cents. However, the reported figure was lower than earnings of 4 cents per share in the year-ago period.Westport Fuel registered revenues of $65.4 million in the third quarter, down 13% year over year.The companyhad cash and cash equivalents of $46.3 million as of Sep 30, 2020, down from $46 million as of Dec 31, 2019. Total debt amounted to $76 million as of Sep 30, 2020, compared with the $49 million as of Dec 31, 2019.

Price Performance

The following table shows the price movement of some of the major auto players over the past week and six-month period.

In the past six months, all stocks have increased, with Tesla TSLA being the maximum gainer. Over the past week, all stocks have moved up apart from Tesla and Advance Auto Parts.

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


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Ford Motor Company (F) : Free Stock Analysis Report
 
Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report
 
General Motors Company (GM) : Free Stock Analysis Report
 
Meritor, Inc. (MTOR) : Free Stock Analysis Report
 
Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
Westport Fuel Systems Inc. (WPRT) : Free Stock Analysis Report
 
Fiat Chrysler Automobiles N.V. (FCAU) : Free Stock Analysis Report
 
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