The Zacks Analyst Blog Highlights: PACCAR, Genuine Parts Company, Tesla, General Motors and Harley-Davidson

For Immediate Release

Chicago, IL – October 27, 2020 – 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: PACCAR Inc PCAR, Genuine Parts Company GPC, Tesla, Inc. TSLA, General Motors Company GM and Harley-Davidson, Inc. HOG.

Here are highlights from Monday’s Analyst Blog:

Auto Stock Roundup: Tesla Earnings, GM Investment & More

Last week, the third-quarter earnings season for the auto sector kicked off. So far this earnings season, just two S&P stocks from the auto sector, namely PACCAR and Genuine Parts, came up with quarterly numbers. Various other auto firms including the red-hot electric vehicle (EV) company Tesla, auto retailers namely Lithia Motors, Penske Automotive and AutoNation. Encouragingly, all the above-mentioned companies managed to deliver earnings beat. 

Meanwhile, U.S. auto giant General Motors grabbed limelight as it continues to step up its EV game. The firm announced plans to spend $2 billion to convert the Tennessee assembly plant to manufacture green vehicles. It also unveiled the first look of 2022 GMC Hummer EV sport utility truck. On the contrary, Harley-Davidson recalled more than 1,000 LiveWire bikes in the United States.

(Read the Last Auto Stock Roundup here).

Recap of the Week’s Most Important Stories

1. Tesla reported stellar results for third-quarter 2020, posting profit for the fifth consecutive quarter. The company reported earnings of 76 cents, which topped the Zacks Consensus Estimate of 55 cents per share. The bottom line also compared favorably with the year-ago earnings of 37 cents a share. Total revenues came in at $8,771 million, surpassing the consensus mark of $8,225 million. The top line also witnessed year-over-year growth of 39%.

Tesla has maintained the target of 500K deliveries for full-year 2020. Importantly, the firm generated free cash flow of $1,395 million during the quarter. The metric compared favorably with $418 million and $371 million recorded in the prior quarter and the year-ago period, respectively. (Tesla Q3 Earnings Beat, '20 Delivery Target Intact)

2. General Motors recently announced the decision to invest $2 billion in its Spring Hill, TN assembly plant. This will facilitate the transition of the assembly plant to become the company’s third vehicle production facility for manufacturing electric vehicles (EV).Its two existing EV manufacturing plants are Factory Zero in Detroit and Hamtramck, MI, and Orion Assembly in Orion Township, MI.

The new luxury Cadillac LYRIQ will be the first EV to be manufactured at Spring Hill, along with the conventional combustion engine-powered Cadillac XT6 and XT5 luxury SUV crossovers, making the plant at Spring Hill not 100% electric, unlike the Factory Zero and Orion Assembly plants. (General Motors Revs Up EV Game, To Invest $2B in U.S. Plant)

3. Harley-Davidson recently issued a voluntary safety recall for certain 2020 LiveWire electric motorcycles due to a potential software defect. Per National Highway Traffic Safety Administration, the recall has been issued due to reports that a few of the 2020 LiveWire motorcycles have electric powertrains that unexpectedly initiate a shutdown without providing a clear notification to the rider that the shutdown sequence has started.

In some cases, the vehicle does not restart after the sudden shutdown due to a software defect in the Onboard Charging system.It is estimated that about 1,012 bikes have been recalled by the company for a software update in lieu of customers’ interests and safety. (Harley-Davidson Recalls LiveWire Bikes for Software Defect)

4. PACCAR reported third-quarter 2020 net earnings per share of $1.11, which surpassed the Zacks Consensus Estimate of 96 cents. However, the earnings figure was lower than the prior-year quarter’s $1.75. The trucking giant registered consolidated revenues (including trucks and financial services) of $4.94 billion, which surpassed the Zacks Consensus Estimate of $4.24 billion. The top-line figure, however, was lower than the year-ago quarter’s $6.37 billion.The company targets to invest $575-$625 million in capital projects and $330-$360 million in R&D expenses next year. (PACCAR's Q3 Earnings & Sales Beat Estimates, Down Y/Y)

5. Genuine Parts reported third-quarter adjusted earnings of $1.63 per share, which surpassed the Zacks Consensus Estimate of $1.48. Moreover, the bottom line was higher than the year-ago quarter’s profit of $1.39 per share. This Atlanta-based automotive replacement parts supplier reported net sales of $4,370 million, which missed the Zacks Consensus Estimate of $4,459 million. Moreover, the top-line figure was lower than the year-ago quarter’s $4,525 million, marking a 3.4% year-over-year decline. Genuine Parts had cash and cash equivalents worth $900.1 million as of Sep 30, 2020. Long-term debt decreased to $2,700.6 million from $2,795.9 million recorded in the year-ago period. (Genuine Parts' Q3 Earnings Beat, Sales Miss Estimates)

Price Performance

In the past six months, all stocks have increased, with Tesla being the maximum gainer. Over the past week, all stocks have gained apart from Tesla.

What’s Next in the Auto Space?

A host of auto biggies are slated to report their quarterly numbers this week. Investors are keenly awaiting quarterly results of U.S. auto giant Ford, Germany-based Volkswagen, and auto parts suppliers including LKQ Corp and O’Reilly Automotive.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release.

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