U.S. Markets closed

The Zacks Analyst Blog Highlights: Tesla, Blue Bird, PACCAR, AutoZone and Motorcar Parts of America

Zacks Equity Research

For Immediate Release

Chicago, IL – January 14, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla, Inc. TSLA, Blue Bird Corp. BLBD, PACCAR Inc PCAR, AutoZone, Inc. AZO and Motorcar Parts of America, Inc. MPAA.

Here are highlights from Monday’s Analyst Blog:

Tesla (TSLA) and Other Automotive Stocks to Zoom in 2020

Since the financial crisis a decade ago, U.S. vehicle sales have only gone up. Sales hit a record 17.6 million in 2016 after it had bottomed out at 10.4 million in 2009. But since then, sales have been near the 17-million mark, providing an unusual steady trend for an industry that is particularly cyclical in nature.

Industry experts, however, expect the auto industry to slow down a bit this year. Analysts now expect U.S. auto sales for the year to decline between 1% to 2%. What’s more, the auto industry in China, the world’s largest auto market, is expected to witness a 2% fall in vehicles sales this year, according to the China Association of Automobile Manufacturers (CAAM). By the way, stricter emission standards may hamper auto sales in the European Union region.

But despite the moribund sales prediction, completely neglecting auto stocks won’t be the right thing to do. Especially if you look at Tesla, Inc.! Wall Street is currently loving the electric carmaker. It has now become the most valuable U.S. automaker in history and its market cap is almost double that of Ford and General Motors combined.

According to data from the Center for Research in Security Prices, Tesla now has a market value of $86 billion, which tops the previous record high of $76.1 billion for shares of Ford in 1999. Needless to say, the Italian car manufacturer Fiat Chrysler is a distant fourth, with a market value of around $22 billion.

But does Tesla’s meteoric rise raises doubt about its future price movement? Certainly not! Even though Tesla recently unveiled its much-awaited all-electric “Cybertruck,” the Model 3 designed for electric-powered performance has been a game changer. And with the company delivering 112,000 vehicles (mostly Model 3) in the fourth quarter of 2019, the company is poised to gain this year as well. The highly-anticipated launch of Model Y, a small crossover vehicle, will also boost the company this year.

Tesla’s orders, in the meantime, have been increasing steadily. Throughout last year, Tesla’s orders grew at an impressive rate. And since the federal credit for U.S.-based buyers of Tesla vehicles has been trimmed, orders will continue to rise this year. Additionally, demand for Model X and S has been increasing sequentially again. Tesla CFO Zach Kirkhorn confirmed that the company is “increasing production on S and X lines in response to increasing demand.”

Tesla, thus, possesses a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has risen 46% over the past 60 days. The company’s expected earnings growth rate for the current year is 79.7%, way more than the Automotive - Domestic industry’s estimated rise of 7.8%. Tesla, in fact, has outperformed the broader industry over the past year (+43.0% vs +18.6%). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

But why just invest in Tesla? Investors should be a little more adventurous and increase their bets on other auto stocks poised to gain in the near term. In this process, you can double your returns. After all, the healthy U.S. economy, low gas prices, low interest rates and longer loan terms bode well for the auto industry this year. So, here are the obvious choices —

Blue Bird Corp.designs, engineers, manufactures and sells school buses and related parts in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 0.5% over the past 60 days. The company, which is part of the Automotive - Domestic industry, is expected to record earnings growth of 80% and 25.5% for the current quarter and year, respectively.

PACCAR Incdesigns, manufactures, and distributes light, medium, and heavy-duty commercial trucks in the United States. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has climbed 0.1% over the past 60 days. The company, which is part of the Automotive - Domestic industry, is expected to see earnings growth of 9.8% in the current year.

AutoZone, Inc. retails and distributes automotive replacement parts and accessories. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 1.1% over the past 60 days. The company, which is part of the Automotive - Retail and Wholesale - Parts industry, is expected to post earnings growth of 3.7% and 4.3% in the current quarter and year, respectively.

Motorcar Parts of America, Inc. manufactures, remanufactures, and distributes heavy-duty truck, industrial, marine, and agricultural application replacement parts. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved 1.7% up over the past 90 days. The company, which is part of the Automotive - Replacement Parts industry, is expected to see earnings growth of 22.9% and 5.2% in the current quarter and year, respectively.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.      

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.   

See the pot trades we're targeting>>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com                                   

https://www.zacks.com                                                 

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Click to get this free report Tesla, Inc. (TSLA) : Free Stock Analysis Report PACCAR Inc. (PCAR) : Free Stock Analysis Report Blue Bird Corporation (BLBD) : Free Stock Analysis Report AutoZone, Inc. (AZO) : Free Stock Analysis Report Motorcar Parts of America, Inc. (MPAA) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research