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Several auto stocks are starting to stand out as new additions to the Zacks Rank #1 (Strong Buy) list this week.
Along with positive earnings estimate revisions being indicative of their improved outlook, these highly ranked auto stocks are attractive in terms of value which further suggests that now is an ideal time to invest.
Starting with Cummins, its Zacks Automotive-Internal Combustion Engines Industry is in the top 1% of almost 250 Zacks industries.
Cummins is benefiting from the industry's strong business demand as a leading global provider of diesel and natural gas engines and powertrain-related component products. Furthermore, the acquisition of the renowned auto supplier Meritor has seemingly unlocked the company’s growth by expanding its mobility, braking, and electric powertrain solutions along with other aftermarket parts for commercial and industrial vehicle markets.
To that point, Cummins acquired Meritor in 2022 for $3.7 billion and has immediately reaped the rewards after reaching records in operating cash flow, EBITDA, and sales of $34.06 billion last year. This was also accompanied by records in net income and EPS of $19.69. Notably, Cummins' stock is up +15% YTD with its robust top and bottom-lines expected to take a slight dip in fiscal 2024 but are projected to rebound and rise to new records in FY25. Plus, Cummins' stock trades at a reasonable 14.5X forward earnings multiple, and FY24 and FY25 EPS estimates are up 3% and 6% over the last 60 days respectively.
Considering earnings estimates have remained higher, Ford Motor’s stock looks too cheap to ignore right now trading at $11 and just 5.8X forward earnings.
Annual earnings are now expected at $2.02 per share in FY24 and FY25 with sales projected to hover near $170 billion. Plus, Ford is still very well in the upper tier of domestic automakers bidding to take EV market share from Tesla (TSLA - Free Report) outside of its traditional lineup of gasoline vehicles.
More appealing to investors, particularly income seekers is that Ford’s annual dividend yield currently stands at 5.09% compared to General Motors' (GM - Free Report) 1.01% with it being noteworthy that many automakers (including Tesla) prioritize their internal growth and don’t offer a payout to shareholders.
Among foreign automakers, Suzuki Motor’s stock has stood out this year rising +8% but still trading at 11.7X forward earnings. Suggesting more upside, the iconic motorcycle manufacturer has seen earnings estimates for its current FY25 spike 11% over the last 60 days with FY26 EPS estimates up 4%. Leading to higher investor sentiment is Suzuki’s ambition to enter the EV market including plans to introduce a compact electric-powered “flying car” in 2025 which aims to have take-off and landing capabilities while also operating as a land-based vehicle.
Image Source: Zacks Investment Research
Bottom Line
Cummins, Ford Motor, and Suzuki Motor are certainly three of the most intriguing auto stocks to invest in at the moment as rising earnings estimates offer support to their cheap P/E valuations. Better still, these top auto stocks should remain viable investments for 2024 and beyond.
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3 Intriguing Auto Stocks to Buy Now
Several auto stocks are starting to stand out as new additions to the Zacks Rank #1 (Strong Buy) list this week.
Along with positive earnings estimate revisions being indicative of their improved outlook, these highly ranked auto stocks are attractive in terms of value which further suggests that now is an ideal time to invest.
Cummins (CMI - Free Report)
Starting with Cummins, its Zacks Automotive-Internal Combustion Engines Industry is in the top 1% of almost 250 Zacks industries.
Cummins is benefiting from the industry's strong business demand as a leading global provider of diesel and natural gas engines and powertrain-related component products. Furthermore, the acquisition of the renowned auto supplier Meritor has seemingly unlocked the company’s growth by expanding its mobility, braking, and electric powertrain solutions along with other aftermarket parts for commercial and industrial vehicle markets.
To that point, Cummins acquired Meritor in 2022 for $3.7 billion and has immediately reaped the rewards after reaching records in operating cash flow, EBITDA, and sales of $34.06 billion last year. This was also accompanied by records in net income and EPS of $19.69. Notably, Cummins' stock is up +15% YTD with its robust top and bottom-lines expected to take a slight dip in fiscal 2024 but are projected to rebound and rise to new records in FY25. Plus, Cummins' stock trades at a reasonable 14.5X forward earnings multiple, and FY24 and FY25 EPS estimates are up 3% and 6% over the last 60 days respectively.
Image Source: Zacks Investment Research
Ford Motor (F - Free Report) )
Considering earnings estimates have remained higher, Ford Motor’s stock looks too cheap to ignore right now trading at $11 and just 5.8X forward earnings.
Annual earnings are now expected at $2.02 per share in FY24 and FY25 with sales projected to hover near $170 billion. Plus, Ford is still very well in the upper tier of domestic automakers bidding to take EV market share from Tesla (TSLA - Free Report) outside of its traditional lineup of gasoline vehicles.
More appealing to investors, particularly income seekers is that Ford’s annual dividend yield currently stands at 5.09% compared to General Motors' (GM - Free Report) 1.01% with it being noteworthy that many automakers (including Tesla) prioritize their internal growth and don’t offer a payout to shareholders.
Image Source: Zacks Investment Research
Suzuki Motor (SZKMY - Free Report) )
Among foreign automakers, Suzuki Motor’s stock has stood out this year rising +8% but still trading at 11.7X forward earnings. Suggesting more upside, the iconic motorcycle manufacturer has seen earnings estimates for its current FY25 spike 11% over the last 60 days with FY26 EPS estimates up 4%. Leading to higher investor sentiment is Suzuki’s ambition to enter the EV market including plans to introduce a compact electric-powered “flying car” in 2025 which aims to have take-off and landing capabilities while also operating as a land-based vehicle.
Image Source: Zacks Investment Research
Bottom Line
Cummins, Ford Motor, and Suzuki Motor are certainly three of the most intriguing auto stocks to invest in at the moment as rising earnings estimates offer support to their cheap P/E valuations. Better still, these top auto stocks should remain viable investments for 2024 and beyond.