The Zacks Analyst Blog Highlights: Tesla, Blue Bird, PACCAR, AutoZone And Motorcar Parts Of America

For Immediate Release

Chicago, IL – January 14, 2020 – 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: Tesla, Inc. (NASDAQ:TSLA) , Blue Bird Corp. (NASDAQ:BLBD) , PACCAR Inc (NASDAQ:PCAR) , AutoZone, Inc. (NYSE:AZO) and Motorcar Parts of America, Inc. (NASDAQ:MPAA) .

Here are highlights from Monday’s Analyst Blog:

Tesla (TSLA) and Other Automotive Stocks to Zoom in 2020

Since the financial crisis a decade ago, U.S. vehicle sales have only gone up. Sales hit a record 17.6 million in 2016 after it had bottomed out at 10.4 million in 2009. But since then, sales have been near the 17-million mark, providing an unusual steady trend for an industry that is particularly cyclical in nature.

Industry experts, however, expect the auto industry to slow down a bit this year. Analysts now expect U.S. auto sales for the year to decline between 1% to 2%. What’s more, the auto industry in China, the world’s largest auto market, is expected to witness a 2% fall in vehicles sales this year, according to the China Association of Automobile Manufacturers (CAAM). By the way, stricter emission standards may hamper auto sales in the European Union region.

But despite the moribund sales prediction, completely neglecting auto stocks won’t be the right thing to do. Especially if you look at Tesla, Inc.! Wall Street is currently loving the electric carmaker. It has now become the most valuable U.S. automaker in history and its market cap is almost double that of Ford and General Motors (NYSE:GM) combined.

According to data from the Center for Research in Security Prices, Tesla now has a market value of $86 billion, which tops the previous record high of $76.1 billion for shares of Ford in 1999. Needless to say, the Italian car manufacturer Fiat Chrysler is a distant fourth, with a market value of around $22 billion.

But does Tesla’s meteoric rise raises doubt about its future price movement? Certainly not! Even though Tesla recently unveiled its much-awaited all-electric “Cybertruck,” the Model 3 designed for electric-powered performance has been a game changer. And with the company delivering 112,000 vehicles (mostly Model 3) in the fourth quarter of 2019, the company is poised to gain this year as well. The highly-anticipated launch of Model Y, a small crossover vehicle, will also boost the company this year.

Tesla’s orders, in the meantime, have been increasing steadily. Throughout last year, Tesla’s orders grew at an impressive rate. And since the federal credit for U.S.-based buyers of Tesla vehicles has been trimmed, orders will continue to rise this year. Additionally, demand for Model X and S has been increasing sequentially again. Tesla CFO Zach Kirkhorn confirmed that the company is “increasing production on S and X lines in response to increasing demand.”

Tesla, thus, possesses a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has risen 46% over the past 60 days. The company’s expected earnings growth rate for the current year is 79.7%, way more than the Zacks Investment Research

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Written By: Zacks Investment Research