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Here’s What Wall St. Experts Are Saying About These Automakers Ahead of Earnings

Posted October 24, 2023 at 10:30 am
Kelly Carroll
The Fly

GM expected to report Q3 EPS of $1.88 on revenue $43.83B, Ford expected to report Q3 EPS 46c on revenue of $41.06B

General Motors (GM) is scheduled to report quarterly results before market open on Tuesday, October 24 with a conference call scheduled for 8:30 am EST, while Ford (F) is scheduled to report after market close on Thursday, October 26, with a conference call scheduled for 5:00 pm EST. What to watch for:


In October, General Motors announced the company and its dealers delivered 674,336 vehicles in the U.S. in the third quarter of 2023, up 21% year-over-year. Strong customer demand for GM’s portfolio of trucks and SUVs drove sales growth across all its brands in the third quarter, GM said, noting total sales are up 19% for the calendar year. GM and its joint ventures also reported delivery of over 541,000 vehicles in China in Q3.


In July, the company said it will begin to integrate NACS starting in 2025. GM customers will have access to 12,000 Tesla (TSLA) Superchargers and 30,000 DC fast charging stations in early 2024. Additionally in July, BMW Group (BMWYY), GM, Honda (HMC), Hyundai (HYMLF), Kia (KIMTF), Mercedes-Benz Group (DDAIF) and Stellantis NV (STLA) announced a joint venture to accelerate the transition to electric vehicles in North America, which will include the development of a new, high-powered charging network with at least 30,000 chargers. In August, EVgo (EVGO) and GM announced they have surpassed 1,000 fast charging stalls as part of their longstanding collaboration to expand fast charging infrastructure. The company also announced in August that it will expand vehicle -to-home bidirectional charging technology across its retail portfolio of Ultium-based EVs by model year 2026. The company also announced subsidiary Cruise began testing robotaxis in Seattle and Washington D.C. in August. GM also led a $60M Series B financing round in AI-enabled battery materials innovator Mitra Chem in August.


In September, the United Auto Workers union announced that thousands of its members at Ford, General Motors and Stellantis walked out, “marking the beginning of the Stand Up Strike.” UAW members at GM Wentzville Assembly, Local 2250 in Region 4, at Stellantis Toledo Assembly Complex, Local 12 in Region 2B, and at Ford Michigan Assembly Plant – Final Assembly and Paint, Local 900 in Region 1A are on strike. “This fight is our generation’s defining moment. Not just at the Big Three, but across the entire working class,” the UAW said in a statement at the time. Subsequently in September, UAW President Shawn Fain announced that the union was expanding its Stand Up Strike against General Motors and Stellantis at 38 locations across 20 states. At the end of the month, the UAW further expanded its strike against Ford and General Motors after contract talks failed to reach a deal. In an unannounced move, 8,700 UAW members walked off the job in October, shutting down Ford’s Kentucky Truck Plant in Louisville.


In October, Barclays lowered the firm’s price target on General Motors and kept an Equal Weight rating on the shares. Amid weak investor sentiment, the Q3 prints for the auto and mobility space “could be a buy-the-news quarter,” the analyst said. The firm believes the UAW strike “has passed peak rhetoric” and an opportunity exists for a recovery trade in autos. Specifically, it sees several data points which may drive upside in the stocks amid cyclical recovery – especially for suppliers.


In August, Ford reported July U.S. sales rose 5.9% to 173,639 vehicles from 163,942 vehicles in the same month of last year. Electric vehicle sales declined 18.1% to 6,280 units from 7,669 in July 2022. In September, Ford reported U.S. sales rose 2% to 161,300 vehicles from 158,088 vehicles in the same month last year. Electric vehicle sales rose 17.7% to 6,940 units from 5,897 in August 2022. In October, Ford reported Q3 sales increased 7.7% year-over-year. “We saw strong balanced sales growth providing choice to our customers in the third quarter, with growth coming from our gas engine, electric, hybrid and commercial van lineup,” said Andrew Frick, vice president, sales, distribution and trucks. “Ford’s truck lineup remains the industry’s top seller. The Maverick and Bronco Sport remain red hot after Ford boosted manufacturing capacity earlier this year. The all-new seventh generation Mustang is off to a jack-rabbit start in its first full month, up 90 percent in September over last year.” The company also reported Q3 EV sales increased 14.8% to 20,962 vehicles.


In August, Ford resumed production of the F-150 Lightning following a six-week shutdown to expand and retool the Rouge Electric Vehicle Center plant in Michigan to triple manufacturing capacity of the electric truck. With the expansion, Ford will have ability to produce the F-150 Lightning at an annualized rate of 150,000 units. Additionally in August, Ford named Apple (AAPL) veteran Peter Stern to lead the newly formed Ford Integrated Services, which will create and market valuable software-enabled customer experiences across Ford Blue, Model e and Ford Pro. The company’s Ford Pro also unveiled new charging solutions for commercial customers in August. In September, Ford announced a pay increase for 8,000 United Auto Workers employees. Additionally in September, BMW Group, Ford and American Honda entered into an agreement to create ChargeScape, which they call “a new equally-owned company that will create a single, cost-effective platform connecting electric utilities, automakers and interested electric vehicle customers.”


In October, BofA noted that UAW commenced a strike at the Ford Kentucky Truck plant in Louisville, where the company’s most profitable vehicles are assembled. This latest strike “represents a serious blow to Ford’s North America operations given the profitability of the plant and its importance to Ford’s production ecosystem,” said the analyst, who estimates that the work stoppage the plant will have a weekly $247M EBIT impact, or 5c on an EPS basis. This brings the total weekly run-rate impact for Ford from the UAW strike to $430M in EBIT, or 8c on an EPS basis, said the analyst, who noted the firm’s 2023 estimates for Ford include $10.7B in EBIT with EPS at $1.96. The firm, which calls this move from the UAW “concerning” given that Ford “gave the largest concessions to the union among the Detroit Three,” has a Buy rating on Ford shares.

Originally Posted October 23, 2023 – Here’s what Wall St. experts are saying about these automakers ahead of earnings

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