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Despite Tesla’s (TSLA - Free Report) slowing sales growth several auto stocks have been among the stock markets' top performers this year. While Tesla’s stock has largely lagged the broader market, a few domestic automakers have outperformed thanks to their steady growth and attractive valuations.
Joining them is foreign automaker Toyota Motor (TM - Free Report) whose monstrous growth has been fueled by its extensive lineup of hybrid electric vehicles (HEVs). The options of HEVs and traditional gasoline vehicles appear to be separating these top automakers from Tesla at the moment.
Furthermore, their continued expansion into fully electric vehicles and sharing more of the EV market share with Tesla looks inevitable given their loyal customer bases.
Toyota Motor’s Market Edge
The track record of selling some of the most dependable and durable cars on the market has built Toyota Motor’s brand and loyal customer base. This has allowed the Japanese automaker to go from selling cheaper-than-average cars for most of the 1980s and '90s to offering electrified vehicles that can have a price tag of up to $60,000.
Nowadays, Toyota Motor’s brand is thought to be worth nearly $30 billion which is second among all global automakers next to Tesla.
Image Source: Statista
Innovating its brand, Toyota Motor was one of the first traditional automakers to adapt to the EV concept. Including its Toyota and Lexus brands the company now has a total of 26 electrified vehicle options which is the most of any automaker.
Although mostly HEVs, electrified vehicles account for 30% of Toyota Motor sales with its top and bottom line reaching new heights in recent years. Plus, Toyota Motor’s stock trades at 10X forward earnings with its EPS projected to soar 73% in fiscal 2024 to $23.06 per share.
Image Source: Zacks Investment Research
General Motors Increased Profitability
Often overlooked as just a value stock, General Motors' (GM - Free Report) increased profitability has become very appealing considering shares trade at just 4.3X forward earnings. With GM trading around $40 its stock looks compellingly cheap as annual earnings are expected to pop 17% this year and rise another 3% in FY25 to $9.25 per share.
Notably, General Motors has regained the crown as the top-selling automaker in the United States and also delivered 75,883 all-electric vehicles in 2023 which was second in the domestic market behind Tesla.
Image Source: Zacks Investment Research
PACCAR’s More Attractive Valuation
Remaining a dominant leader among truck manufacturers, PACCAR (PCAR - Free Report) is also ahead of the adaption to hybrid and all-electric models for big rigs while others have seemingly failed with Nikola (NKLA - Free Report) being a prime example.
PACCAR’s expansion and strong price performance have left little doubt with PCAR shares up +96% over the last three years. However, what is most enticing is that PACCAR’s stock currently trades at a reasonable 14.1X forward earnings multiple which is a significant discount to its decade-long high of 28X and near the median of 13.8X.
Image Source: Zacks Investment Research
Blazing YTD Performances
Correlating with their market dominance at the moment, Toyota Motor’s stock has soared +28% year to date with PACCAR and General Motors shares up +21% and +13% respectively which has blasted Tesla’s -34% and topped the S&P 500’s +7%.
Image Source: Zacks Investment Research
Bottom Line
Toyota Motor, General Motors, and PACCARS’s stock are all enjoying positive earnings estimate revisions and when considering their attractive P/E valuations now looks like an ideal time to buy. These hot auto stocks all sport a Zacks Rank #1 (Strong Buy) and have an “A” Zacks Style Scores grade for Value.
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3 Hot Auto Stocks to Buy in March
Despite Tesla’s (TSLA - Free Report) slowing sales growth several auto stocks have been among the stock markets' top performers this year. While Tesla’s stock has largely lagged the broader market, a few domestic automakers have outperformed thanks to their steady growth and attractive valuations.
Joining them is foreign automaker Toyota Motor (TM - Free Report) whose monstrous growth has been fueled by its extensive lineup of hybrid electric vehicles (HEVs). The options of HEVs and traditional gasoline vehicles appear to be separating these top automakers from Tesla at the moment.
Furthermore, their continued expansion into fully electric vehicles and sharing more of the EV market share with Tesla looks inevitable given their loyal customer bases.
Toyota Motor’s Market Edge
The track record of selling some of the most dependable and durable cars on the market has built Toyota Motor’s brand and loyal customer base. This has allowed the Japanese automaker to go from selling cheaper-than-average cars for most of the 1980s and '90s to offering electrified vehicles that can have a price tag of up to $60,000.
Nowadays, Toyota Motor’s brand is thought to be worth nearly $30 billion which is second among all global automakers next to Tesla.
Image Source: Statista
Innovating its brand, Toyota Motor was one of the first traditional automakers to adapt to the EV concept. Including its Toyota and Lexus brands the company now has a total of 26 electrified vehicle options which is the most of any automaker.
Although mostly HEVs, electrified vehicles account for 30% of Toyota Motor sales with its top and bottom line reaching new heights in recent years. Plus, Toyota Motor’s stock trades at 10X forward earnings with its EPS projected to soar 73% in fiscal 2024 to $23.06 per share.
Image Source: Zacks Investment Research
General Motors Increased Profitability
Often overlooked as just a value stock, General Motors' (GM - Free Report) increased profitability has become very appealing considering shares trade at just 4.3X forward earnings. With GM trading around $40 its stock looks compellingly cheap as annual earnings are expected to pop 17% this year and rise another 3% in FY25 to $9.25 per share.
Notably, General Motors has regained the crown as the top-selling automaker in the United States and also delivered 75,883 all-electric vehicles in 2023 which was second in the domestic market behind Tesla.
Image Source: Zacks Investment Research
PACCAR’s More Attractive Valuation
Remaining a dominant leader among truck manufacturers, PACCAR (PCAR - Free Report) is also ahead of the adaption to hybrid and all-electric models for big rigs while others have seemingly failed with Nikola (NKLA - Free Report) being a prime example.
PACCAR’s expansion and strong price performance have left little doubt with PCAR shares up +96% over the last three years. However, what is most enticing is that PACCAR’s stock currently trades at a reasonable 14.1X forward earnings multiple which is a significant discount to its decade-long high of 28X and near the median of 13.8X.
Image Source: Zacks Investment Research
Blazing YTD Performances
Correlating with their market dominance at the moment, Toyota Motor’s stock has soared +28% year to date with PACCAR and General Motors shares up +21% and +13% respectively which has blasted Tesla’s -34% and topped the S&P 500’s +7%.
Image Source: Zacks Investment Research
Bottom Line
Toyota Motor, General Motors, and PACCARS’s stock are all enjoying positive earnings estimate revisions and when considering their attractive P/E valuations now looks like an ideal time to buy. These hot auto stocks all sport a Zacks Rank #1 (Strong Buy) and have an “A” Zacks Style Scores grade for Value.