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Auto Stock Roundup: WGO's Stellar Q1 Earnings, MGA-FSR Deal & More

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Rimmi Singhi
·5 min read
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Last week, European Automobile Manufacturers Association released passenger car registration data for the month of November. New car registrations in European Union declined 12% from the prior-year quarter to 897,692 units amid lockdown measures enforced in several member states following a second wave of COVID-19 infections. New car registrations in France and Spain witnessed double-digit decline of 27% and 18.7%, respectively. The same in Italy and Germany recorded a decline of 8.3% and 3%, respectively. For the 11 months ended November 2020, EU passenger car registrations slipped 25.5% to around 9 million units amid the pandemic-led sluggish demand.

Meanwhile, Navistar International Corporation NAV and Winnebago Industries WGO reported their quarterly results, wherein both the firms managed to surpass earnings estimates. Banking on strong first-quarter fiscal 2021 results, AutoZone Inc. AZO boosted the buyback program.

(Read the Last Auto Stock Roundup here).

Recap of the Week’s Most Important Stories

Navistar reported fourth-quarter fiscal 2020 adjusted earnings of 62 cents per share, surpassing the Zacks Consensus Estimate of 23 cents. The bottom line, however, deteriorated from the year-ago profit of $1.14 per share amid lower year-over-year revenues due to the coronavirus pandemic. The truck maker registered revenues of $2,065 million for the October-end quarter, missing the Zacks Consensus Estimate of $2,090 million. Moreover, the top line marked a 25.7% year-over-year plunge due to coronavirus-led lower demand in core markets.At quarter-end, Navistar had cash and cash equivalents of $1,843 million, and total debt of $4,690 million.

Winnebago reported first-quarter fiscal 2021 (ended Nov 28, 2020) adjusted earnings per share of $1.69, surpassing the Zacks Consensus Estimate of $1.03.The bottom line also marked a year-over-year jump of 131.5%. The firm registered revenues of $793.1 million for the reported quarter, beating the Zacks Consensus Estimate of $742 million. Moreover, the top line recorded a 34.8% year-over-year increase. Revenues from Towable and Motorhome segments jumped 33.3% and 42.7% year over year, respectively, for the quarter under review. At quarter-end, Winnebago had cash and cash equivalents of $272.9 million, along with total debt of $516.5 million. Winnebago currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AutoZone’s board of directors authorized the buyback of an additional $1.5 billion of the company’s common stock related to the ongoing share-repurchase program.It has authorized a total of $24.65 billion in share repurchases to date, including the above amount. AutoZone tapped brakes on the program amid coronavirus-induced uncertainty. It resumed the share-buyback program in first-quarter fiscal 2021, in turn boosting investors' confidence. AutoZone intends to usethe proceeds from the share repurchase to boost shareholders’ value, at the same time maintaining sufficient liquidity, which provides adequate financial flexibility.

Oshkosh Corporation OSK entered into an agreement to acquire Pratt Miller for a purchase price of $115 million.The transaction, projected to complete in first-quarter 2021, is subject to conventional closing conditions.This buyout will help Oshkosh to navigate through the untapped market of uncrewed ground vehicles (UGV) and establish a strong foothold therein, thereby enhancing its offerings. Moreover, the combination of Pratt Miller’s engineering specialty with Oshkosh’s innovation and operational efficiency will enable the latter to better serve customers, as well as fuel its long-term growth.The acquisition of a niche technology company like Pratt Miller has made Oshkosh the future of the UGV market.

Magna International Inc. MGA entered into an agreement with Fisker Inc. FSR for Fisker Ocean sport utility vehicle (SUV) production. Production of the Fisker Ocean SUV is scheduled to commence within fourth-quarter 2022. Fisker Ocean SUV will initially be produced solely by Magna in Europe, where it currently manufactures several premium quality vehicles on behalf of international brands. Fisker plans to roll out a production-intent prototype of the Ocean in the summer of 2021. The Ocean SUV will use a modified version of a Magna-developed electric vehicle platform, FM29, as the starting point. The latest agreement is a classic example of Magna’s strategy to extend the manufacturing arm for meeting future mobility needs by lending the firm’s vehicle engineering and manufacturing capabilities.

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 General Motors and Harley-Davidson.

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Navistar International Corporation (NAV) : Free Stock Analysis Report
 
Magna International Inc. (MGA) : Free Stock Analysis Report
 
AutoZone, Inc. (AZO) : Free Stock Analysis Report
 
Oshkosh Corporation (OSK) : Free Stock Analysis Report
 
Winnebago Industries, Inc. (WGO) : Free Stock Analysis Report
 
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