AZO & THO Q1 earnings, TSLA & NIO stock offering

Last week, the China Automobile Manufacturers Association (“CAAM”) released vehicle sales data for the month of November. By CAAM, car sales for the month were up 12.6% year on year to 2.77 million units and sales of new energy vehicles (NEVs) were up 104.9% to 200,000 units. NEVs include electric, plug-in gasoline-electric hybrids and hydrogen fuel cell vehicles. Sales for November were up for the eighth consecutive month in a row, while NEV sales in the country were up for the fifth consecutive month of growth. However, January to November sales for the world’s largest car market are still lower than 2019, down 2.9% from January to November compared to the corresponding period of 2019.

(Read the Last Auto Stock Roundup here).

Summary of the main stories of the week

AutoZone, Inc. AZO reported earnings of $ 18.61 per share for the first quarter of fiscal 2021 (ending Nov. 21, 2020), up from last year’s $ 14.3 figure. The bottom line also surpassed the Zacks Consensus Estimate of $ 17.72. Net sales also increased 12.9% year over year to $ 3,154.3 million. However, the top line marginally missed the $ 3,164 million Zacks Consensus Estimate. At the end of the quarter, AutoZone had cash and cash equivalents of $ 1,664 million and total debt of $ 5,514.9 million. The total number of stores was 6,590 on November 21, 2020.

Thor Industries, Inc. THO reported adjusted earnings of $ 2.05 per share for the first quarter of fiscal 2021 (ended October 31, 2020), which exceeded the Zacks Consensus Estimate of $ 1.46. The bottom line is also up 123% from a year ago’s profit of 92 cents. The recreational vehicle manufacturer recorded sales of $ 2,537 million in the quarter, beating Zacks’ consensus estimate of $ 2,379 million. In addition, sales recorded an increase of 17.5% on an annual basis. The consolidated order book was $ 8.92 billion at the end of the quarter, an increase of 194.5% over the same period last year.

Tesla TSLA has decided to suspend production of high-performance S and X electric models (EVs) at its Fremont California plant from December 24 to January 11. There are several theories as to why the production line has been temporarily shut down. Some say the shutdown is for possible reforms of the S and X production lines. Other theories argue that there may be minor design changes for Model S and Model X, similar to that of Model 3. Another is that the battery designs outlined for Model 3 and Model Y are also used for these premium vehicles.

Meanwhile, the red-hot EV maker also announced plans to raise up to $ 5 billion through equity offering in an effort to bolster its balance sheet and complete the sale of its stock offering within a day. Importantly, this was the company’s second capital increase through equity financing in the past three months. Earlier in September, it announced a $ 5 billion capital increase, taking advantage of its impressive price gains.

Tesla currently has a Zacks Rank # 3 (Hold). You can see the full list of the current Zacks # 1 Rank (Strong Buy) stocks here.

NIO Inc. NIO has priced its $ 68 million stock offering at $ 39 per ADS, with a 30-day option to increase to 78.2 million US depository shares. The company aims to use 60% of the proceeds from the offering, primarily for research and development of new products and driverless technologies. About 30% will be spent on expanding the sales and service network, while the remaining 10% will be allocated to general corporate purposes.

Price performance

The following table shows the price movement of some of the major car players over the past week and six-month period.

In the past six months, all stocks have risen, with Tesla as the maximum profit. In the past week, all stocks have declined except Toyota TM and Advanced auto parts MONKEY.

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Toyota Motor Corporation (TM): Free Stock Analysis Report

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