Chicago, IL — November 13, — Zacks. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. The excitement over the elections and the possibility of a vaccine coming sooner rather than later has made the earnings season something of a non-event. In case of auto stocks for example, I have been pointing out the recovering demand right through the summer. In fact, concerns about public transportation systems and the desire to get out especially after COVID restrictions had many people opting for road trips. These two factors are leading to more vehicle purchases. The only offsetting factor, if you can call it that, is the level of unemployment, which is however also ticking down. This means that auto makers may be expected to jump out of this health crisis pretty quickly. We want to be able to buy the right stock so we can hang on to it for a certain number of years, watching our wealth grow in the process. So how do we know whether these indications of recovery in the broader market are actually falling through to the individual players in the industry? That basically means that they have a relatively good chance of appreciating. Ford is seeing much stronger demand in its largest market North America especially in trucking and with dealers building inventory. Its China business also grew double-digits in the last quarter, where it is picking up SUV market share. Market share gains are seen in all the major markets of North America, Europe and China. It continues to lose share in South America. New product launches remain on track and production ramps could negatively impact profits this quarter. The expected loss in has gone from 67 cents to 22 cents in the last 30 days while the expected profit for has gone from 66 cents to 82 cents. Like Ford, GM is also seeing a faster recovery in the U. The company is maintaining its leading U. The other major theme for GM is its transition to an all-electric product line. Related launch costs may also be expected to increase. A greater focus on building a product line that meets customer demand while helping the company embrace the new EV and AV trends in automotive is the main focus of management. If it has to swallow some commodity cost increases or other hiccups along the way, then so be it. Harley Davidson is primarily benefiting from its restructuring activities, as sales remain significantly below year-ago levels, partly because new product launches will now be in the first quarter instead of in August as has happened in the past. There again, it is not pursuing growth in all segments but maintaining its premium position. Its restructuring actions included the cutting down of dealer inventories, which drove up prices and demand for used motorcycles and helped dealer profits. COVID restrictions further reduced inventories. Similar to Ford, Harley Davidson is seeing significant revision to estimates. The Zacks Consensus Estimate for is up 56 cents While down from last year, overall demand has picked up since the pandemic, particularly in Asia. Uncertainties in the U. The motorcycle business should hold steady as strength across India the largest market , Brazil and the U. Stronger demand and cost cutting measures are driving estimate revisions for fiscal year ending in March. As a result, the Zacks Consensus Estimate is up 51 cents The estimate is up 10 cents 3. So other automakers are also beginning to look attractive as are the other players in the supply chain.
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