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Auto Stock Roundup: Tesla Plunges on SolarCity Offer, Winnebago Posts Earnings
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Tesla Motors, Inc.’s (TSLA - Free Report) proposal to acquire SolarCity Corporation was the biggest news of the week in the auto sector. Tesla’s CEO Elon Musk, who is also the chairman and a shareholder of SolarCity, has been vigorously defending the offer but analysts and investors have reacted negatively. It will be interesting to see whether the deal moves forward.
Meanwhile, Winnebago Industries, Inc. (WGO - Free Report) posted strong earnings and revenue figures for the third quarter of fiscal 2016, while Advance Auto Parts, Inc. (AAP - Free Report) announced the opening of new Super Hub stores. Further, Ford Motor Co. (F - Free Report) posted an increase in Europe sales in May but the figures lagged industry sales growth. Honda Motor Co., Ltd. (HMC - Free Report) announced the recall of another one million vehicles in China to replace possibly defective Takata airbags.
Recap of the Week’s Most Important Stories
1. Tesla announced an offer to buy SolarCity at an exchange ratio of 0.122x to 0.131x shares of Tesla for each share of SolarCity. This represents a premium of around 21−30% over the closing price of SolarCity as of Jun 21. According to Tesla, this acquisition will help it to become the only vertically integrated energy company in the world that offers end-to-end clean energy products (read more: Tesla Proposes to Buy SolarCity: What's in Store?).
However, investors reacted negatively to the news that was viewed by most as a bail out of SolarCity by Tesla. Concerns related to the impact of SolarCity’s high cash usage and operating losses on Tesla’s already strained financials pulled shares of the latter down 11.6% in after hours trading on Tuesday. Shares continued to tumble on Wednesday and in pre-market trading today.
2. Winnebago reported earnings of 53 cents per share in the third quarter of fiscal 2016 (ended May 28, 2016), 25.5% higher than 43 cents earned in the prior-year quarter. Also, the figure surpassed the Zacks Consensus Estimate of 46 cents. Revenues for the third quarter increased 2.1% to $272.1 million and surpassed the Zacks Consensus Estimate of $270 million. The year-over-year increase in the top line was due to strong growth in the towables business and moderate rise in motorized shipments.
3. Honda’s Chinese joint venture, Dongfeng Honda Automobile Co., announced the recall of another one million vehicles to replace possibly defective Takata airbags. The vehicles covered under the latest recall include Honda CR-V utility vehicles, Civic and Platinum Rui sedans, and Civic hybrids produced by the joint venture between 2007 and 2011. The Japanese automaker is the largest customer of the faulty Takata airbags that can explode and shoot out metal fragments in a crashed vehicle (read more: Honda Expands Recall for Takata Airbags in China).
4. Ford recorded an 11.5% year-over-year rise in sales to 111,700 vehicles in its 20 traditional European markets (Euro 20) in May 2016. With this, the automaker lagged the industry’s sales growth rate of 15.1%. This is the company’s best May sales since 2011. In the first five months of 2016, Ford’s sales increased 8.6% to 588,500 vehicles, compared with the industry’s growth rate of 9.9% (read more: Ford's Europe Sales Rise 11.5% in May, Lag Industry Growth).
5. Advance Auto Parts announced the opening of three Super Hub stores in Marietta, Riverdale and Norcross. These stores increase the frequency of supply of high-quality parts to Commercial repair shops in the Atlanta Metro area.
Performance
Auto sector companies had mixed fortunes on the stock market last week. With a gain of 4.5%, Harley-Davidson, Inc. (HOG - Free Report) was leading the winners among the stocks listed below. Tesla lost a massive 9.7% as investors reacted negatively to its SolarCity buyout offer. The news pulled down Tesla’s stock price by 10.45% on Wednesday.
Meanwhile, Honda lost the most among the stocks listed below over the last six months. Advance Auto Parts was the biggest gainer over this period.
Company
Last 1-Week Period
Last 6 Months
GM
+1.6%
-15.7%
F
+1.3%
-8.2%
TSLA
-9.7%
-14.4%
TM
+3.9%
-16.2%
HMC
-0.4%
-19.9%
HOG
+4.5%
-0.9%
AAP
-0.3%
+2.8%
AZO
+1.2%
+1.6%
What’s Next in the Auto Space?
On Jun 28, 2016, Thor Industries will pay a quarterly cash dividend of 30 cents per share to shareholders of record as of Jun 20.
On Jun 30, 2016, Lear Corporation will pay a quarterly cash dividend of 30 cents per share to shareholders of record as of Jun 10.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Auto Stock Roundup: Tesla Plunges on SolarCity Offer, Winnebago Posts Earnings
Tesla Motors, Inc.’s (TSLA - Free Report) proposal to acquire SolarCity Corporation was the biggest news of the week in the auto sector. Tesla’s CEO Elon Musk, who is also the chairman and a shareholder of SolarCity, has been vigorously defending the offer but analysts and investors have reacted negatively. It will be interesting to see whether the deal moves forward.
Meanwhile, Winnebago Industries, Inc. (WGO - Free Report) posted strong earnings and revenue figures for the third quarter of fiscal 2016, while Advance Auto Parts, Inc. (AAP - Free Report) announced the opening of new Super Hub stores. Further, Ford Motor Co. (F - Free Report) posted an increase in Europe sales in May but the figures lagged industry sales growth. Honda Motor Co., Ltd. (HMC - Free Report) announced the recall of another one million vehicles in China to replace possibly defective Takata airbags.
Recap of the Week’s Most Important Stories
1. Tesla announced an offer to buy SolarCity at an exchange ratio of 0.122x to 0.131x shares of Tesla for each share of SolarCity. This represents a premium of around 21−30% over the closing price of SolarCity as of Jun 21. According to Tesla, this acquisition will help it to become the only vertically integrated energy company in the world that offers end-to-end clean energy products (read more: Tesla Proposes to Buy SolarCity: What's in Store?).
However, investors reacted negatively to the news that was viewed by most as a bail out of SolarCity by Tesla. Concerns related to the impact of SolarCity’s high cash usage and operating losses on Tesla’s already strained financials pulled shares of the latter down 11.6% in after hours trading on Tuesday. Shares continued to tumble on Wednesday and in pre-market trading today.
2. Winnebago reported earnings of 53 cents per share in the third quarter of fiscal 2016 (ended May 28, 2016), 25.5% higher than 43 cents earned in the prior-year quarter. Also, the figure surpassed the Zacks Consensus Estimate of 46 cents. Revenues for the third quarter increased 2.1% to $272.1 million and surpassed the Zacks Consensus Estimate of $270 million. The year-over-year increase in the top line was due to strong growth in the towables business and moderate rise in motorized shipments.
3. Honda’s Chinese joint venture, Dongfeng Honda Automobile Co., announced the recall of another one million vehicles to replace possibly defective Takata airbags. The vehicles covered under the latest recall include Honda CR-V utility vehicles, Civic and Platinum Rui sedans, and Civic hybrids produced by the joint venture between 2007 and 2011. The Japanese automaker is the largest customer of the faulty Takata airbags that can explode and shoot out metal fragments in a crashed vehicle (read more: Honda Expands Recall for Takata Airbags in China).
4. Ford recorded an 11.5% year-over-year rise in sales to 111,700 vehicles in its 20 traditional European markets (Euro 20) in May 2016. With this, the automaker lagged the industry’s sales growth rate of 15.1%. This is the company’s best May sales since 2011. In the first five months of 2016, Ford’s sales increased 8.6% to 588,500 vehicles, compared with the industry’s growth rate of 9.9% (read more: Ford's Europe Sales Rise 11.5% in May, Lag Industry Growth).
5. Advance Auto Parts announced the opening of three Super Hub stores in Marietta, Riverdale and Norcross. These stores increase the frequency of supply of high-quality parts to Commercial repair shops in the Atlanta Metro area.
Performance
Auto sector companies had mixed fortunes on the stock market last week. With a gain of 4.5%, Harley-Davidson, Inc. (HOG - Free Report) was leading the winners among the stocks listed below. Tesla lost a massive 9.7% as investors reacted negatively to its SolarCity buyout offer. The news pulled down Tesla’s stock price by 10.45% on Wednesday.
Meanwhile, Honda lost the most among the stocks listed below over the last six months. Advance Auto Parts was the biggest gainer over this period.
Company
Last 1-Week Period
Last 6 Months
GM
+1.6%
-15.7%
F
+1.3%
-8.2%
TSLA
-9.7%
-14.4%
TM
+3.9%
-16.2%
HMC
-0.4%
-19.9%
HOG
+4.5%
-0.9%
AAP
-0.3%
+2.8%
AZO
+1.2%
+1.6%
What’s Next in the Auto Space?
On Jun 28, 2016, Thor Industries will pay a quarterly cash dividend of 30 cents per share to shareholders of record as of Jun 20.
On Jun 30, 2016, Lear Corporation will pay a quarterly cash dividend of 30 cents per share to shareholders of record as of Jun 10.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>