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JP Morgan: 2 automatic shares that can be forwarded in 2021
The US auto industry is looking up, despite the COVID pandemic – and it has car guards and Wall Street analysts in the direction of cautious optimism. Customers are starting to buy cars again, as evidenced by Toyota Motor’s figures in December: the company reported sales of 249,601 vehicles, an increase of 20.4% year-on-year. With the increase in vaccination rates and the better spring weather just a few months later, the automakers are predicting greater demand – and by 2021 they expect to see significant gains on an annual basis if they return from depressed sales in the ‘corona’. year.’ Against this background, JP Morgan in particular is hitting two car stocks on the table, noting that each could rise at least 20% in the coming year. We led the two through the TipRanks database to see what other Wall Street analysts have to say about it. Ford Motor (F) Ford Motor is the smallest of Detroit’s big three. However, with a market capitalization of $ 45 billion, Ford shows that ‘small’ is a relative concept. The company also boasts a loyal customer base and a solid sales base built on the F-Series pickups. Ford’s Q3 revenue, at $ 37.5 billion, showed a reversal due to the corona-induced losses of 1H20; it was the strongest quarter yet reported for 2020, beating expectations by 13%. Net profit for the third quarter was $ 2.34 billion in the third quarter, up 22% year-on-year. The quarterly performance is boosted by a 35% market share for the F-Series trucks in the US market, a 22% increase in product shipments to China, and the best performance by Ford Credit in 15 years. Over the past few months, however, Ford has gotten a few hits. The company had to issue a number of safety recalls on the North American market this past November on select models of the Taurus, Explorer, Edge and Lincoln Aviator vehicles. And earlier this month, Ford announced it would hit $ 4.1 billion due to the closure of three manufacturing plants in Brazil. Analyst Ryan Brinkman, who rates Ford for JPM, notes several factors that will support the stock. ‘We find Ford shares attractive, given the valuation only in line with history despite a number of important positive aspects, including (1) a significantly refreshing vehicle lineup with new launches, such as the Mustang Mach-E battery electric crossover , new Ford Bronco (> 190K reviews), Bronco Sport and the upcoming F-150); (2) a refreshed F-150 has historically led to a significant improvement in North American profitability, which we expect by 2Q21; (3) the “Bold Moves” Ford is making to redirect its international operations, including recently in South America, we think it will release capital for use in initiatives that are likely to reward investors more, such as electrification and autonomy attempts. , ”Wrote Brinkman. In line with his positive comments, Brinkman upgraded his position on F from Neutral to Overweight (ie Buy) and set a price target of $ 14, implying an upward trend of 25% for the coming year. (To view Brinkman’s record, click here. Overall, Wall Street tends to be cautious, where JPM is willing to take a risk. The stock has 12 recent reviews, divided into 4 buy, 7 holders and 1 sell. The shares sell for $ 11.19, and the average price target of $ 10.01 indicates a 11% downside from current levels. (See Ford’s stock analysis on TipRanks) General Motors (GM) General Motors, best known for its initials, is the largest of Detroit’s automakers, with a market capitalization of $ 75 billion, up 58% in the past twelve months and 210% higher than the corona-induced low point. hit last March – GM’s recent performance impressed motoring viewers, with the company showing $ 35.5 billion at the top in the third quarter, which was its best quarterly revenue over the past four quarters, and consistent with its 3Q19 results Revenue was $ 4 billion d, or $ 2.78 per share, a year-on-year jump of 74%. The results for the fourth quarter are due to appear on February 10, but preliminary sales figures show an increase of 4.8% per year, despite a 11.8% drop in US car sales for the year. The company outperformed its industry in the fourth quarter, and for the full year on the strength of its pickup and SUV lines – a testament to the continued popularity of mid-size trucks in the consumer market. Other models that are selling strongly include the all-electric Chevy Bolt, of which sales increased by 26%, and the classic Chevy Corvette, which increased sales by 20%. GM is also increasing autonomous vehicle work through the Cruise division. In January, the company debuted the Cruise Origin, a production model for a driverless vehicle. The Origin was designed from the start as an autonomous vehicle, and therefore does not have a manual steering system. Future production will be centered at the GM Detroit-Hamtramck plant; for the first time testing the vehicle in the streets of San Francisco. In his notes on GM for JP Morgan, analyst Ryan Brinkman predicts steady growth. “GM’s 4Q20 global production of light vehicles followed + 16% year-on-year, firmly better than expected in mid-October … GM’s trend in production in 4Q was stronger than Ford’s, given the non-recurrence of the UAW strike, which had a negative impact on 3Q and 4Q20… 4Q20 GM production outside North and South America, followed significantly better than expected in mid-October, driven by strong recovery in sales in China, “Brinkman rates GM shares as overweight (ie buy) and its $ 63 one-time price target indicates that it has confidence in an upward potential of 21%, and GM has based its strong buy consensus rating on good performance that has attracted 12 Buy ratings over the past three months, compared to only 1 Hold. This stock is selling for $ 52.04, and the average price target of $ 55.50 implies an increase of ~ 7% (see GM shares analysis on TipRanks) To find good ideas for car stocks that trade at attractive valuations, visit TipRanks ‘best stocks to buy, a newly launched tool that has united all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are those of the proposed analyst. The content is for informational purposes only. It is very important to do your own analysis before investing.