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Auto Stock Roundup: CNHI-Raven Deal, KMX and WGO's Earnings & More

Last week, the European Automobile Manufacturers Association released data for commercial vehicle registrations made in May 2021. New registrations edged up 51.3% year over year to 165,363 units. The upside was a result of COVID-induced demand slump in the year-ago period. Most of the European Union markets saw double-digit surge in April 2021. Registrations in major markets like Spain, Italy, France, and Germany surged 89.6%, 51.3%, 28.4% and 46.4%, respectively.

Meanwhile, auto biggies including Volkswagen VWAGY, General Motors GM and Ford F came up with fresh updates demonstrating their e-mobility prowess amid heightening climate concerns. While General Motors sports a Zacks Rank #1 (Strong Buy), Ford and Volkswagen carry Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Volkswagen stated its intention to phase out the sale of internal combustion engine vehicles in Europe by 2035. The Germany-based auto giant targets to make its entire fleet carbon neutral by 2050.

The Detroit-based auto giant, General Motors, intends to electrify its entire fleet by 2040 and has committed to targets that are in sync with the most ambitious goals of the Paris Agreement. Last week, General Motors entered into a partnership with Shell for providing its Texas customers and supply-chain partners with fixed-rate comprehensive renewable energy plans as well as other incentives designed to make owning a green vehicle convenient and more affordable.

Meanwhile, Ford’s micromobility subsidiary — Spin — unveiled its first in-house built electric scooter, the Spin S-100T. The e-bike will be first rolled out in Sacramento, CA, next month. The launch of S-100T marks Spin’s latest effort to electrify its fleet and enhance foothold in the two-wheeler market.

Last Week’s Top Stories

CarMax KMX reported first-quarter fiscal 2022 (ended May 31, 2021) net earnings per share of $2.63, surpassing the Zacks Consensus Estimate of $1.61 and skyrocketing 8,666.7% year over year. The auto retailer registered revenues of $7,697.6 million for the May-end quarter, beating the Zacks Consensus Estimate of $6,194 million and jumping 138.4% year over year. During the fiscal first quarter, the company opened two new locations and aims to open 10 new stores in fiscal 2022. Per its long-term targets (unveiled last month), CarMax forecasts $33 billion revenues and 2 million units sold per year by fiscal 2026.

CNH Industrial CNHI announced its decision to acquire 100% capital stock of agricultural tech company, Raven Industries. In a $2.1-BILLION deal, CNH Industrial will pay $58 per share to Raven, representing a 33.6% premium to the latter's four-week volume-weighted average stock price. The transaction, expected to conclude in fourth-quarter 2021, will be funded by CNH Industrial through available cash on hand. The buyout will give CNH Industrial access to Raven’s cutting-edge technology in the agriculture industry, thus bolstering the position of the former in the global agriculture equipment business.

Winnebago Industries WGO reported third-quarter fiscal 2021 (ended May 29, 2021) adjusted earnings per share of $2.16, surpassing the Zacks Consensus Estimate of $1.76 and turning around from the year-ago loss of 26 cents. This recreational vehicle maker reported revenues of $960.7 million for the quarter under review, outpacing the Zacks Consensus Estimate of $852 million. Moreover, the top line skyrocketed 138.6% year over year. At quarter-end, the company had cash and cash equivalents of $405.8 million and long-term debt of $524.4 million.

Tesla TSLA launched a solar-powered super-charging station in the Tibetan capital of Lhasa, being the first such facility in China. With the new super-charging station in Tibet, Tesla aims to expand the solar business into the mainland, which is the biggest market for EVs in the world. In fact, the company is also launching an energy department — Tesla Energy — in China to sell Solar Roof and Powerwall products in the country.

In a separate development, Tesla issued a recall for about 285,000 electric vehicles in China over faulty cruise control system. The recall consists of 211,256 locally produced Model 3 sedans and 35,665 imported ones, as well as 38,599 China-made Model Ys.

Price Performance

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

Image Source: Zacks Investment Research

In the past six months, all stocks have increased, with Ford being the maximum gainer. In the past week as well, all stocks have moved up, with Harley-Davidson registering the maximum gain.

What’s Next in the Auto Space?

Car enthusiasts will be keeping a close watch on June 2021 U.S. car sales, which will be coming out later this week. Industry watchers would be closely tracking the sales reports of auto biggies including Ford, Volkswagen, Honda and Toyota. 

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.

See 3 crypto-related stocks now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Ford Motor Company (F): Free Stock Analysis Report
General Motors Company (GM): Free Stock Analysis Report
CarMax, Inc. (KMX): Free Stock Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
Winnebago Industries, Inc. (WGO): Free Stock Analysis Report
CNH Industrial N.V. (CNHI): Free Stock Analysis Report
Volkswagen AG (VWAGY): Free Stock Analysis Report
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