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Auto Stock Roundup: GM-NKLA Revised Deal, ADNT Q4 Earnings & More

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Rimmi Singhi
·6 min read
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Last week, auto biggies rolled out their November sales figures, which witnessed a year-over-year decline amid the resurgence of coronavirus cases. A second wave of coronavirus infections hit the United States hard, causing auto sales’ speedy recovery to lose momentum in November after two consecutive months of year-over-year gains. Toyota’s sales dropped 1%, Hyundai’s slipped 9%, Ford's fell 20.9% and Honda’s slid 23.4% in November from the numbers recorded in the corresponding period last year. (U.S. November Auto Sales Recovery Loses Steam: Here's Why)

On the news front,Tesla procured an official permission to start selling its Shanghai-made Model Y series of sports utility vehicle in China.Tesla’s flagship model in China — Model Y — has been recently registered officially with the nation’s Ministry of Industry and Information Technology (“MIIT”). Chinese regulators at the MIIT published the sales approval on its website on Nov 30.

Meanwhile, putting an end to the speculations concerning the much-awaited deal between General Motors GM and Nikola Corporation NKLA, the former withdrew from the previously planned partnership and instead announced a reworked agreement. Per the revised proposal, General Motors has inked a non-binding memorandum of understanding to supply hydrogen fuel cells to Nikola. The U.S. auto bigwig will no longer manufacture the Badger truck for Nikola. In fact, Nikola’s Badger EV pickup project has been abandoned altogether and the company will refund all the deposits for the same. The revised deal hit Nikola hard, with its shares tumbling 32.4% in the past week. While Nikola currently carries a Zacks Rank #3 (Hold), General Motors sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

(Read the Last Auto Stock Roundup here).

Recap of the Week’s Most Important Stories

Oshkosh Corporation’s OSK subsidiary — Oshkosh Defense LLC — recently announced that the company has secured an order for joint light tactical vehicles (JLTVs) worth $911 million from the U.S. Army Contracting Command, Detroit Arsenal, making it the second largest order to date for Oshkosh Defense JLTVs. The contract consists of supplying 2,738 JLTVs, and 1,001 companion trailers and associated kits. The vehicles will be supplied to the Army, Navy, Marine Corps and the U.S. Air Force. As part of the agreement, 59 vehicles will be delivered to NATO and non-NATO allies, including Lithuania, North Macedonia, as well as Brazil.

CNH Industrial CNHI has entered into a five-year agreement to collaborate with Microsoft and Accenture to help it develop smart connected products and services, as well as boost digital technologies.The key element of the five-year alliance is the creation of a global network of digital hubs in Brazil, Europe, India and the United States by the three companies. In these hubs, the companies will work jointly to design, roll out and coordinate a set of data-driven services using advanced analytics, artificial intelligence as well as cloud computing aimed at making CNH Industrial’s products smarter, more reliable, and sustainable.

Adient PLC ADNT reported adjusted earnings per share of $1.15 for fourth-quarter fiscal 2020, beating the Zacks Consensus Estimate of 96 cents. Moreover, the bottom line surged 82.5% on a year-over-year basis. For the reported quarter, Adient generated net sales of $3,597 million, down from the year-ago figure of $3,921. The top line also missed the Zacks Consensus Estimate of $3,644 million.For fiscal 2021, it expects revenues of $14.6-$15 billion. Adjusted EBITDA is anticipated in the band of $1-$1.1 billion. Moreover, the company projects free cash flow of up to 100 million.

Daimler AG DDAIF recently announced new investment plan of more than 70 billion euros ($85 billion) from 2021 through 2025. The investment is part of the company’s strategic course of action to accelerate its ongoing transformation toward electrification and digitization targeted at achieving the desired level of profitability.The investment will be made in the company’s research and development (R&D) and property, plant and equipment from 2021 through 2025. The aim is to reduce Mercedes-Benz’s R&D expenditure and capital expenditure during this period, and make it more than 20% lower in 2025 than that incurred in 2019. Further, within this business plan, Daimler’s Truck arm will be able to strengthen its plans toward providing carbon-free transportation.

Asbury Automotive Group ABG launched Clicklane — the company’s end-to-end e-commerce platform — and unveiled its five-year strategic growth plan. The online shopping platform Clicklane would ensure a true online car buying and selling experience. Asbury has teamed up with Gubagoo's Virtual Retailing 2.0 to build this full-digital retailing solution, enabling the company to accelerate the car buying experience across its store base. Importantly, the company updated on its ambitious five-year growth plan to generate revenues of $20 billion by 2025. It plans to achieve this goal by attaining same-store revenue growth of $2 billion and acquiring $5 billion of additional revenues over five years, as well as adding an incremental $5 billion of revenues through the new Clicklane platform.

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 being the maximum gainer. Over the last week, all stocks have gained apart from Harley Davidson.

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General Motors Company (GM) : Free Stock Analysis Report
 
Daimler AG (DDAIF) : Free Stock Analysis Report
 
Oshkosh Corporation (OSK) : Free Stock Analysis Report
 
Asbury Automotive Group, Inc. (ABG) : Free Stock Analysis Report
 
CNH Industrial N.V. (CNHI) : Free Stock Analysis Report
 
Adient PLC (ADNT) : Free Stock Analysis Report
 
Nikola Corporation (NKLA) : Free Stock Analysis Report
 
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