3 Auto Stocks Better Than Rivian (RIVN)
Global demand for electric vehicles is expected to drive significant growth in the automobile industry. Amid this positive backdrop, it would be wise to buy three stocks, Toyota Motor Company (TM), Hino Motors Co., Ltd. (Hinoi(and Ferrari Nevada)race), which is fundamentally stronger than Rivian Automotive, Inc. (Raven).
Automotive company RIVN posted weak financials in its last reported quarter. Although its losses narrowed compared to the same period a year earlier, the company still reported a net loss of $1.37 billion attributable to common shareholders and a net loss per share of $1.44.
Moreover, RIVN’s dismal profitability scenario is worrying. Trailing 12-month EBIT margin and net income margin were negative 157.40% and 148.97% compared to industry averages of 7.40% and 4.29%, respectively.
On the other hand, the automobile industry in general shows strong prospects. The industry’s growth is attributed to global demand for vehicles, the adoption of automation and robotics technology, increasing demand for electric and hybrid vehicles, and a focus on sustainability and energy efficiency.
Car sales maintained their momentum this year due to improved demand compared to previous years. Light vehicle sales are expected to grow globally About 8% in 2023. In 2024, it is expected to achieve a balance between production and sales.
Moreover, with the unprecedented rise in electric vehicle adoption, growth in car sales is expected to continue. Electric vehicles are expected to account for 40% of global car sales by 2030, which translates to About 40 million carsWith an additional 20 million hybrids.
Moreover, the global automobile industry is expected to grow at a CAGR of 3%. $3.58 trillion in 2031.
With such concrete prospects in mind regarding Car and vehicle manufacturers Industry Now let’s dive into the stock fundamentals of the above stocks, starting with number three.
Stock #3: Toyota Motor Company (TM)
Headquartered in Toyota, Japan, TM designs, manufactures, assembles and sells passenger cars, vans, commercial vehicles and related parts and accessories. Working in the automotive field. financial services; And all other sectors.
On November 9, TM Toyota Indiana announced a major milestone as it began production of the first-ever Lexus TX, an all-new three-row luxury SUV. This would enhance the company’s revenue stream.
On October 31, TM announced a new investment of approximately $8 billion in Toyota Battery Manufacturing of North Carolina (TBMNC), adding capacity to support battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). This is expected to support TM’s multi-path approach to global vehicle electrification.
For the fiscal second quarter ending September 30, 2023, TM’s total sales revenue rose 24% year over year to 11.43 trillion yen ($75.69 billion), while its operating income increased 155.6% from the same quarter a year earlier to 1.44 trillion yen ( 9.52 billion dollars).
Its net income Earnings per share Revenues to TM were 1.32 trillion yen ($8.74 billion) and 94.51 yen, registering improvements of 186.3% and 197.9% over last year’s values, respectively.
TM’s revenue is expected to increase 3.9% year over year to $287.41 billion for the fiscal year ending March 2024. Earnings per share are also expected to increase 668.1% from the prior year to $20.49. Additionally, it has topped revenue estimates in each of the trailing four quarters, which is impressive.
TM shares are up 34.9% year-to-date and 30.8% over the past six months to close the last trading session at $184.22.
TM Energy ratings It reflects her promising outlook. The stock has an overall rating of B, which translates to Buy in our rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to its optimal score.
The stock carries a grade of A for sentiment and a grade of B for growth and stability. It is ranked No. 25 out of 52 B-rated stocks Car and vehicle manufacturers industry.
In addition to above, we also evaluated TM in terms of value, momentum and quality. Get all TM reviews here.
Stock No. 2: Hino Motors Co., Ltd. (Hinoi)
HINOY, a TM company, is a global manufacturer of large commercial vehicles, including trucks, buses, light commercial vehicles and passenger vehicles. Headquartered in Hino, Japan, the company also produces automotive and industrial diesel engines, along with vehicle parts.
On October 27, HINOY announced carbon neutrality initiatives, focusing on a “multi-pathway” approach with internal combustion and electric vehicles, with the aim of reducing CO2 emissions throughout the vehicle’s life cycle.
In the same month, HINOY announced that it would be returned to the CJPT Project, committing to contribute to CJPT’s activities to achieve a carbon neutral society through the deployment of CASE technology.
Such moves reflect HINOY’s dedication to environmental goals and collaborative efforts, aiming to strengthen and accelerate initiatives with partners despite past misconduct, affecting its standing in collaborative projects.
During the fiscal period between April 1, 2023 and September 30, 2023, HINOY’s net sales reached JPY755.39 billion (US$5 billion), up 3% year-on-year, while its gross profit increased marginally year-on-year. To 124.01 billion yen ($820.87 million). Interest income increased by 22.1% from the same period of the previous year to 1.06 billion yen ($7 million).
The Street expects HINOY’s revenues to increase 66.3% year over year for the fiscal year ending March 2024 to $10.35 billion, while for the fiscal year ending March 2025, revenues are expected to reach $11.61 billion, indicating 12.1% growth over Annual basis. during the year.
The stock has fallen 11.1% over the past six months to close the last trading session at $35.25.
HINOY’s POWR ratings reflect this promising outlook. The stock has an overall rating of B, which equates to Buy in our rating system.
HINOY also received a grade of B for value and stability. It is ranked #24 out of 52 stocks in the same industry. click here For additional POWR ratings for HINOY’s growth, momentum, confidence and quality.
Stock #1: Ferrari NV (race)
Headquartered in Maranello, Italy, RACE designs, engineers, manufactures and sells luxury high-performance sports cars worldwide. It also provides spare parts, engines, after-sales, repair, maintenance and restoration services for cars and licenses its Ferrari brand to various producers and retailers of luxury and lifestyle goods.
On November 7, RACE announced its intention to continue a multi-year share buyback program worth approximately €2 billion (US$2.14 billion), expected to be implemented by 2026. Such initiatives could enhance the company’s shareholder returns.
For the fiscal quarter ending September 30, 2023, RACE’s net revenue rose 23.5% year-on-year to €1.54 billion ($1.65 billion), while its adjusted EBITDA grew 41.5% from the same quarter last year to €423. 1 million euros ($452.41). million).
Also, the company’s adjusted net profit and adjusted earnings per share were €332 million ($355.08 million) and €1.82, up 45.6% and 48% year over year, respectively.
RACE’s revenue and EPS are expected to increase 14.5% and 29.5% year over year to $6.36 billion and $7.20 for the fiscal year ending December 2023. Furthermore, the company beat consensus EPS estimates in each of the trailing four quarters. And it’s amazing.
RACE shares have risen 66.7% over the past year to close the latest trading session at $335.89. Over the past six months, shares have risen 14.2%.
RACE’s POWR ratings reflect a strong outlook. The stock has an overall rating of B, which equates to Buy in our rating system.
It also has an A grade for quality and a B grade for growth, stability, and emotion. It is ranked No. 18 in the industry.
To access additional assessments of RACE’s value and momentum, click here.
What to do next?
Steve Reitmeister, a 43-year investing veteran, has released his 2024 market predictions along with his trading plan and top 11 picks for next year.
Stock market predictions for 2024>
TM shares were trading at $186.47 per share on Friday afternoon, up $2.25 (+1.22%). Year-to-date, TM stock has risen 38.74%, compared to a 16.22% rise in the benchmark S&P 500 index during the same period.
About the author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets led her to pursue a career in investment research. more…
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(Tags for translation) NYSE:TM