Tesla Vehicle Deliveries Hit Another Record in Q3, Beats Analysts’ Estimates

Tesla has weathered the chip crisis better than rivals, with its overall deliveries surging 20% in the July to September period from its previous record in the second quarter, marking the sixth consecutive quarter-on-quarter gains. .

In China, rising exports to Europe and the introduction of a cheaper Model Y helped boost Tesla’s production, analysts said.

Musk said Tesla suffered an extremely severe parts shortage earlier in the third quarter and had urged employees to make quarter-end delivery push, Reuters reported last month, citing an internal company email.

“The end of quarter delivery wave is unusually high this time,” he said in the email.

Tesla delivered 241,300 vehicles globally in the July to September quarter, up 73% from a year earlier. Analysts had expected the electric-car maker to deliver 229,242 vehicles, according to Refinitiv data.

General Motors, Honda and some of its bigger rivals posted declines in U.S. sales in the third quarter, hit by a prolonged chip shortage. GM’s third-quarter U.S. sales fell nearly 33% to its lowest level in more than a decade.

Tesla said it delivered 232,025 of its Model 3 compact cars and Model Y sport-utility vehicles and 9,275 of its flagship Model S and Model X cars to customers in the quarter.

Total production in the third quarter rose over 15% to 237,823 vehicles from the prior quarter.

CHINA

Gary Black, portfolio manager at the Future Fund and a Tesla bull, said that Tesla’s deliveries were driven by record deliveries in China, which was “putting to rest any notion China demand is slowing.”

Tesla faces scrutiny from both regulators and the public and growing competition from local rivals.

Tesla has not released its September China sales yet, and in August, its Shanghai factory exported more than two thirds of its vehicles to Europe and Asian countries.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Juby Babu and Nivedita Balu in Bengaluru and Hyunjoo Jin in SAN FRANCISCO Editing by Marguerita Choy)

GM to Cut North American Production, Citing Chip Shortage

The largest U.S. automaker will halt production next week at its Fort Wayne plant in Indiana and its Silao plant in Mexico, both of which build pickup trucks. In total, GM is cutting production at eight North American assembly plants in September.

The industry-wide chip shortage is causing massive auto production cuts around the globe and auto industry officials say the problem is getting worse.

GM shares were largely unchanged in late trading Thursday.

Earlier this week, Ford Motor Co said it will also cut truck production next week because of the chips shortage and said its August U.S. sales were down 33% on the chip shortage. Toyota Motor Corp said last month it will slash global production for September by 40% from its previous plan.

GM will halt production at its Wentzville, Missouri plant for two weeks starting Sept. 6 that builds midsize trucks and full-size vans. GM will also halt production at the CAMI Assembly in Canada and San Luis Potosi Assembly in Mexico for two additional weeks. The company builds its Equinox SUV at both plants.

The automaker is also idling production for two additional weeks at its Lansing Delta Township plant that builds the Chevrolet Traverse and the Buick Enclave.

GM will cut two weeks of production in September at the Spring Hill Tennessee plant that builds the GMC Acadia, Cadillac XT5 and Cadillac XT6. Its Ramos, Mexico plant will take two additional weeks of downtime for Blazer production, while Equinox production will be down through the week of Sept. 27.

Production of the Equinox has been down since Aug. 16.

Democratic Senator Mark Warner said the “continuing impact of the chip shortage – epitomized most recently in the news that GM will be forced to idle plants across North America – speaks to the urgency of passing bipartisan legislation to fund new semiconductor production in the United States.”

GM said during production downtime it will repair and ship unfinished vehicles from many impacted plants, including Fort Wayne and Silao.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by David ShepardsonEditing by David Evans and Chizu Nomiyama)

Why General Motors Stock Is Down By 3% Today

General Motors Stock Declines As Company Expands Chevrolet Bolt EV Recall

Shares of General Motors remain under pressure after the company stated that it would expand the recall of its Chevrolet Bolt electric vehicles due to the risk of fire from the battery pack. This recall would cost as much as $1 billion. The previous recall costed $800 million, so battery-related problems are projected to cost $1.8 billion.

General Motors stock gained downside momentum at the start of this month after the company’s earnings guidance missed analyst estimates. The new $1 billion blow has already put material pressure on the company’s shares, and the market will likely remain focused on the EV recall and global chip shortage in the upcoming weeks.

What’s Next For General Motors Stock?

Analyst estimates have trended down in recent weeks, which is not surprising as the company has reduced its adjusted earnings guidance to $5.40 – $6.40 per share for the full year 2021. Currently, analyst consensus calls for earnings of $6.33 per share in 2021 which is close to the high end of the company’s guidance, but it is clear that earnings estimates will continue to decline.

In 2022, General Motors is projected to report earnings of $6.93 per share, so the stock is trading at forward P/E of less than 7. However, earnings estimates may move lower in the upcoming weeks, which is often bearish for a stock.

At this point, General Motors stock needs upside catalysts to break the current downside trend. Otherwise, the market will remain focused on the company’s problems with the battery pack and the global ship shortage which hurts all automakers.

It remains to be seen whether value-oriented investors will be ready to increase purchases of General Motors stock after the recent pullback. Current valuation levels look cheap but earnings estimates may move lower, and the stock needs additional positive catalysts to gain upside momentum.

For a look at all of today’s economic events, check out our economic calendar.

General Motors Earnings Could Beat Q2 Estimates; Target Price $74

General Motors, an American multinational corporation that was the world’s largest motor-vehicle manufacturer in the 20th century, is expected to report earnings of $2.23 per share in the second quarter, representing a year-over-year increase of over 540% from a loss of $0.50 per share a year ago.

The Detroit, Michigan-based auto manufacturer would also post revenue growth of about 73% to $29 billion. According to ZACKS Research, the company has beaten earnings per share (EPS) estimates in all of the last four quarters.

General Motors stock closed 1.49% higher at $57.88 on Tuesday. The shares have gained 39% so far this year.

Analyst Comments

“We expect General Motors (GM) to beat the consensus estimates for revenues but fall slightly short on earnings. The company has reported better than expected earnings figures in each of the last four quarters while revenue was better than market estimates in two of the last four quarters,” noted analysts at Trefis.

“In the past year and a half, the company was affected due to various lockdowns across the world due to the pandemic. The Automotive sector is currently also affected by the global shortage of semiconductor chips which is affecting production across the world. Our forecast indicates that GM’s valuation is $70 per share, which is 26% above the current market price of $55.”

General Motors Stock Price Forecast

Fifteen analysts who offered stock ratings for General Motors in the last three months forecast the average price in 12 months of $74.73 with a high forecast of $90.00 and a low forecast of $60.00.

The average price target represents a 29.11% change from the last price of $57.88. From those 15 analysts, 14 rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $80 with a high of $120 under a bull scenario and $32 under the worst-case scenario. The firm gave an “Overweight” rating to the motor-vehicle manufacturer’s stock.

“We are OW based on GM’s diversified portfolio, with multiple ways for General Motors (GM) to enhance shareholder value, through: EVs, ICE and Autonomy. GM also has leading North American margins, generates strong cash flow, and has a robust balance sheet,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We believe that the market is underestimating the SOTP of the GM enterprise via: 1) Legacy ICE, 2) GM EV, 3) GM’s Ultium Battery business, 4) China JVs, 5) GM Finco, 6) GM Cruise, 7) hidden franchise value in brands such as Corvette and 8) GM Connected Services. GM management has a proven track record to allocate capital away from structurally challenged areas towards re-positioning the business model.”

Several other analysts have also updated their stock outlook. RBC raised the stock price forecast to $77 from $72. BofA lifted the price objective to $90 from $80. UBS upped the target price to $79 from $75.

General Motors Could Hit New All-Time High on Strong Q1 Earnings; Target Price $69

General Motors, the largest US-based automaker, is expected to report its first-quarter earnings of $1.02 per share, which represents year-over-year growth of over 64% from $0.62 per share seen in the same quarter a year ago.

The Detroit, Michigan-based company would post revenue growth of about 2% to around $33.3 billion.

General Motors’s better-than-expected results, which will be announced on Wednesday, May 5, would help the stock hit new all-time highs. General Motors shares rose over 37% so far this year. The stock traded nearly flat at $57.35 on Monday.

General Motors Stock Price Forecast

Twelve analysts who offered stock ratings for General Motors in the last three months forecast the average price in 12 months of $69.42 with a high forecast of $85.00 and a low forecast of $62.00.

The average price target represents a 20.81% increase from the last price of $57.46. Of those 12 analysts, 11 rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $80 with a high of $120 under a bull scenario and $32 under the worst-case scenario. The firm gave an “Overweight” rating on the auto manufacturer’s stock.

Several other analysts have also updated their stock outlook. Credit Suisse raised the target price to $72 from $68. BofA lifted the price objective to $80 from $72. UBS increased the target price to $75 from $50. Daiwa Capital Markets upped the price target to $67 from $60. Jefferies raised the target price to $62 from $50.

Analyst Comments

“We are OW based on General Motors’ (GM) diversified portfolio, with multiple ways for GM to enhance shareholder value, through: EVs, ICE and Autonomy. GM also has leading North American margins, generates strong cash flow, and has a robust balance sheet,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We believe that the market is underestimating the SOTP of the GM enterprise via: 1) Legacy ICE, 2) GM EV, 3) GM’s Ultium Battery business, 4) China JVs, 5) GM Finco, 6) GM Cruise, 7) hidden franchise value in brands such as Corvette and 8) GM Connected Services. GM management has a proven track record to allocate capital away from structurally challenged areas towards re-positioning the business model.”

Check out FX Empire’s earnings calendar

Capitalizing on IPO Mania: Will Stripe’s IPO Become The Biggest of All-Time?

Boosted by huge demand for technology and sustainability stocks, as well as a frenzied rush from blank-check SPAC companies, the volume of IPOs in the US doubled to 494 – raising a collective $174 billion. Now, with the news of payments giants Stripe intending to go public, we may see the biggest initial public offering yet.

According to FactSet, high profile IPOs from Snowflake, Airbnb and Rocket Companies were well received by investors, contributing to 150% year-on-year growth for money raised through offerings.

However, one company that’s seemingly been at the centre of speculation throughout 2020 without pulling the trigger on an IPO was Stripe. In August last year, Stripe sparked a furore when the company announced that it had recruited CFO Dhivya Suryadevara from General Motors to assume the same role at the startup. At the time, it was anticipated that the company was in the final stages of preparing to go public. But instead, the company opted to raise an additional $600 million in new equity from private investors at a seismic valuation of $95 billion.

At a valuation of $95bn, Stripe has become the most valuable US startup, pushing past huge industry players like Elon Musk’s SpaceX and grocery delivery service Instacart. However, the latest fundraising effort could lead the company to the biggest IPO ever.

Entering The IPO Frenzy

Stripe’s push towards an IPO comes at a time when a global IPO frenzy is in full swing. At the end of Q1 in 2021, global dealmaking stood at $1.4 trillion thanks to blank-check SPACs and newfound excitement for tech initial public offerings.

These figures represent a 103% increase in the same period last year, and a faster start to a year in over two decades – according to preliminary data from Dealogic. There’s no sign of the furore simmering down, either.

One of the key reasons behind such astronomical figures stems from the boom in special-purpose acquisition companies (SPACs), which offer private companies a faster route into public markets. SPACs have helped to push equity capital market fees up by almost 340% compared to the same period in 2020 to a total of $13.1 billion – more than double the revenues in any first quarter over the past 20 years.

(Image: Financial Times)

As the data above shows, IPO proceeds already soared to levels that haven’t been seen since the financial crisis of 2008 by the end of last year. Driven largely by unprecedented volumes of SPACs entering the market, more businesses feel emboldened to embrace the huge boom in IPO popularity.

Will Stripe Become the World’s Biggest IPO?

So, will Stripe use the current investment landscape to launch the biggest IPO ever? There are a few things to consider before we can gain a clearer idea of just how seismic the company’s arrival on the New York Stock Exchange will be. Firstly, it’s important to note that these metrics are largely determined by total deal size, rather than the company’s market capitalization. The current biggest IPO belongs to that of Saudi Aramco, which raised $29.4 billion through a home-country listing. Meanwhile, the biggest US-based initial public offering was the 2014 debut of Alibaba, which ultimately raised a total of $25 billion.

Weighing in with a $95 billion valuation means that Stripe has the potential for a huge IPO, but it remains to be seen that the company will beat the aforementioned records at its current valuation. Companies typically avoid releasing too many shares during an IPO as they can pursue follow-on offerings for insiders once the lockup period is over – which tends to be around 90 to 180 days after the initial public offering date.

Although holding the record for the largest IPO will no doubt hold plenty of appeal for the company, it’s unlikely that Stripe would willingly sell almost one-third of its shares for the sake of beating the existing stock market record – but this doesn’t mean that the company should be discounted. Stripe appears to be investing on a global scale and is producing results that have captured the imagination of institutional investors that have been willing to pay way over the odds for admission just one year on from the company’s last fundraising effort. With palpable excitement for both Stripe and the IPO market as a whole, all bets are off when it comes to anticipating the sheer scale of the upcoming floatation.

Buying Stripe’s IPO

With speculation rife about the ultimate size of Stripe’s IPO, many retail investors will likely find the notion of investing in the payments company a tantalizing one to say the least. However, the process of investing in initial public offerings can be tricky for individuals to buy into. This is because many companies choose to sell their shares to institutional investors who are capable of buying huge volumes of their IPO in one single transaction.

Maxim Manturov, Head of Investment Research at Freedom Finance Europe, says that: “Historically, institutional investors get around 90% of all shares, with only around 10% left for retail trades. This is where allocation comes from: when the demand is high, the broker will have to reduce order amounts so as to at least partially fill all of them. The allocation ratio, meanwhile, depends on the investor trading activity and volume.”

That said, there’s still a way for the general public to participate in IPOs – there’re online brokers that allow retail investors to take part in IPOs. However, there’s generally a vetting process to go through and a financial threshold to meet.

However, retail investors can still get in on the action when trading eventually begins on the New York Stock Exchange. In an IPO landscape that’s filled with huge levels of investor confidence, we may yet see Stripe’s initial public offering break plenty of records upon its arrival.

GM Builds Pickups Without Certain Modules Due to Global Chip Shortage, Hurting Fuel Economy

By Ben Klayman

DETROIT (Reuters) – General Motors Co said on Monday that due to the global semiconductor chip shortage the U.S. automaker is building certain 2021 light-duty full-size pickup trucks without a fuel management module, hurting those vehicles’ fuel economy performance.

The lack of the active fuel management/dynamic fuel management module means affected models, equipped with the 5.3-liter EcoTec3 V8 engine with both six-speed and eight-speed automatic transmission, will have lower fuel economy by one mile per gallon, spokeswoman Michelle Malcho said.

Malcho emphasized all trucks are still being built, something GM has repeatedly stressed it would try to protect as pickups are among GM’s most profitable models. She declined to say the volume of vehicles affected.

“By taking this measure, we are better able to meet the strong customer and dealer demand for our full-size trucks as the industry continues to rebound and strengthen,” Malcho wrote in an email.

The change runs through the 2021 model year, which typically ends in late summer or early fall, she said.

Malcho said it would not have a major impact on the Detroit automaker’s U.S. corporate average fuel economy (CAFE) numbers.

“We routinely monitor our fleet for compliance in the U.S. and Canada, and we balance our portfolio in a way that enables us to manage unforeseeable circumstances like this without compromising our overall (greenhouse gas) and fuel economy compliance,” she said.

GM’s fleetwide fuel economy in the 2018 model year was 22.5 miles per gallon and was projected to rise to 22.8 mpg for 2019, according to a report by the Environmental Protection Agency.

To meet federal CAFE requirements, automakers like GM often use credits from either earlier years where they faced less stringent rules and performed better than the requirements or buy credits from other automakers.

GM said last month the chip shortage could shave up to $2 billion from this year’s earnings. It subsequently said it expected global chip supplies to return to normal rates by the second half of the year.

GM’s U.S. rival Ford Motor Co previously said the shortage could hurt 2021 profits by up to $2.5 billion and said it had curtailed production of its flagship F-150 pickup.

The shortage, which has hit automakers globally, stems from a confluence of factors as carmakers, which shut plants for two months during the COVID-19 pandemic last year, compete with the sprawling consumer electronics industry for chip supplies.

Also on Monday, BMW Chief Technology Officer Frank Weber said things will be tough in the short term.

“We hope that this situation is going to improve as we get closer to summer,” he told reporters. “But April and May we expect will be very tough. Predictions, I cannot make because really we are working from week to week. So far we have been very successful and we have not lost a single day in production.”

GM shares were down 2% in midday trading.

 

(Reporting by Ben Klayman in Detroit, additional reporting by David Shepardson in Washington and Nick Carey in London; Editing by Nick Zieminski and Jonathan Oatis)

tagreuters.com2021binary_LYNXMPEH2E12R-VIEWIMAGE