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The Zacks Analyst Blog Highlights: Ford, Honda Motor, Toyota and General Motors

For Immediate Release

Chicago, IL – May 11, 2021 – 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: Ford Motor Company F, Honda Motor Co., Ltd. HMC, Toyota Motor Corporation TM and General Motors Company GM.

Here are highlights from Monday’s Analyst Blog:

Are Automakers Finally Bouncing Back?

The automobile market in the United States is finally getting back on track after taking a bad hit last year. The pandemic saw factories being closed for weeks, which left the carmakers bleeding for the rest of last year. However, this year seems to have started on a better note. According to J.D. Power, automakers for April posted solid growth.

Although the shortage of semiconductors poses a threat for the industry, several brands reported a more than double year-over-year jump in sales. Also, people are willing to spend more and are buying expensive vehicles, thus boosting carmakers' revenues.

April Auto Sales Surge

April was one of the best months for the automobile industry in a long time, or at least since the coronavirus outbreak early last year. According to J.D. Power, new vehicle sales reached 13.6 million units, surging 110.6% year over year.

Trucks and SUV sales are expected to account for 76.1% of the total new vehicle sales. Moreover, new vehicle sales jumped 20.8% from 2019. The record surge in sales comes despite low inventory, which has prompted many dealers to increase the price of vehicles.

However, people still did not mind shelling out more money to buy expensive cars. Almost all major carmakers reported robust sales. Ford Motor reported a sales jump of 13% year over year. Honda Motor Co. sales are up 40% so far over 2020. Ford carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Toyota Motors also reported a surge of 45% in new vehicle sales in April. General Motors Co. doesn't report monthly sales anymore but the company reported that deliveries grew 19% year over year in the first quarter. The company also reported $3 billion in profits in the first quarter, indicating that sales have been on the rise.

Auto Sales Project to Grow

April's sales jump might look a bit too big because sales fell more than 50% in April 2020 after factories had to be closed down temporarily for weeks, following the coronavirus outbreak. Sales started rebounding from May but automakers continued to struggle.

The industry finally started showing some signs of a rebound in the fourth quarter of 2020. This year has so far been good with first-quarter auto sales jumping 13% year over year. With the economy now reopening, another round of stimulus checks in hand and the vaccination drive in full swing, consumer demand for new vehicles is again on the rise.

However, inventories continue to be curtailed by a shortage of microchips. The price hike stemming from this has not however dented sales of new vehicles.

Per TrueCar, U.S. new-vehicle sales in April are expected to reach 1.4 million, suggesting a surge of 97% from April 2020. This once again shows the high demand for new cars. According to a CNBC report, Cox Automotive and LMC Automotive expect auto sales to reach 15.7 million units in 2021.

Given that the Fed is also backing automakers in seeking a speedy solution to the semiconductor shortage, it is likely that the industry will soon bounce back and perform even better than the pre-COVID times.

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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.


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Ford Motor Company (F): Free Stock Analysis Report
 
Honda Motor Co., Ltd. (HMC): Free Stock Analysis Report
 
Toyota Motor Corporation (TM): Free Stock Analysis Report
 
General Motors Company (GM): Free Stock Analysis Report
 
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