Latest news with #EarningsTrend
Yahoo
5 days ago
- Automotive
- Yahoo
4 Auto Stocks Likely to Outperform Q2 Earnings Estimates
We are at the heart of the second-quarter earnings season for the Auto-Tires-Trucks sector and investors are closely monitoring the stocks amid growing uncertainty related to tariffs imposed on imports by the Trump administration. Among the S&P 500 sector components, Tesla, Ford, General Motors, Aptiv and O'Reilly Automotive have reported quarterly numbers and topped earnings the Earnings Trend report dated July 29, the auto sector's earnings for the second quarter of 2025 are expected to decline 27.7% on a year-over-year basis. Revenues are estimated to decline 6% year over several companies yet to report quarterly results, we used the Zacks Stock Screener to identify a few auto stocks that appear well-positioned to surpass the Zacks Consensus Estimate for second-quarter earnings. These include Cummins Inc. CMI, Rivian Automotive, Inc. RIVN, Lucid Group, Inc. LCID and American Axle & Manufacturing Holdings, Inc. AXL. Before we discuss the companies, let's take a look at the factors shaping the quarterly performance of automotive companies. Things to Note U.S. vehicle sales witnessed modest year-over-year growth in the second quarter thanks to robust demand for gasoline-powered and hybrid vehicles. Per Cox Automotive, the seasonally adjusted annual rate of new vehicle units are pegged at 15.3 million in J.D. Power, in June, retail vehicle inventory reached 2.16 million units, up 22.9% from June 2024. The average transaction prices of vehicles in June rose $46,233, up $1,400 from June 2024. The higher tariffs on imports initially spurred demand among price-sensitive buyers, temporarily boosting sales. However, as higher prices became the norm, that momentum started to fade. Additionally, elevated operating costs, particularly in research and development aimed at creating advanced technologies to keep up with the evolving auto industry, are likely to have weighed on earnings. Picking Potential Winners While it is not possible to be sure about which companies are well-positioned to beat earnings estimates, our proprietary methodology — Earnings ESP — makes it relatively simple. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus can see the complete list of today's Zacks #1 Rank stocks research shows that for stocks with the above-mentioned combination, the chances of an earnings beat are as high as 70%. Our Choices Cummins: Cummins is the world's largest engine manufacturer, with a strong product lineup and wide global reach that support its long-term growth. The acquisition of Meritor has enhanced its position as a top provider of integrated powertrain solutions for both internal combustion and electric vehicles. The company is actively positioning itself for long-term growth by ramping up its capabilities in electrification, fuel cell technology, and green hydrogen production. Through its HELM platform, CMI delivers higher efficiency and lower emissions, reinforcing its commitment to clean energy. It expects continued momentum in its electrolyzer technology, supported by a growing pipeline of orders. Cummins currently has an Earnings ESP of +2.79% and carries a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug. 8. The Zacks Consensus Estimate for CMI's to-be-reported quarter's earnings and revenues is pegged at $4.99 per share and $8.47 billion, respectively. CMI surpassed earnings estimates in the trailing four quarters, with the average surprise being 14.22%. Cummins Inc. Price and EPS Surprise Cummins Inc. price-eps-surprise | Cummins Inc. Quote Rivian: Rivian aims to broaden its reach with the upcoming R2 and R3 models, targeting more budget-conscious consumers. The R2, a midsize SUV, is slated for launch in the first half of 2026 with a starting price around $45,000 — significantly lower than the premium R1 lineup. Rivian views the R2 as a key growth driver, citing major cost efficiencies in both materials and manufacturing. The EV maker is benefiting from engineering optimizations, supply chain savings and lower commodity costs. The second-generation R1 models are expected to reduce material costs by 20%, while operational efficiencies at the Normal plant further support cost-cutting efforts. Rivian achieved positive gross profit for the second straight quarter in the first quarter of 2025 and aims for modest gross profit for the full year 2025. RIVN has an Earnings ESP of +8.53% and a Zacks Rank #3 at present. The company is scheduled to release second-quarter results on Aug. 5. The Zacks Consensus Estimate for Rivian's to-be-reported quarter's revenues is pegged at $1.26 billion. The EPS estimate for the second quarter has moved up by 8 cents in the past 90 days. Rivian surpassed earnings estimates in two of the trailing four quarters and missed twice, with the average surprise being 10.81%. Rivian Automotive, Inc. Price and EPS Surprise Rivian Automotive, Inc. price-eps-surprise | Rivian Automotive, Inc. Quote Lucid: Recent developments bode well for the LCID's long-term story. Lucid vehicles are now compatible with Tesla's Supercharger network, giving Lucid owners access to more than 23,500 chargers. This move improves convenience and could boost Air sales in particular. It also recently struck a major deal with Uber to supply more than 20,000 vehicles equipped with Nuro's autonomous tech. Uber has also invested $300 million into Lucid, providing both a cash cushion and a potential sales flywheel as its cars join Uber's global EV fleet. Lucid is also rolling out over-the-air software updates to improve its tech, with new driver-assist features arriving July has an Earnings ESP of +3.08% and carries a Zacks Rank #3 at present. The company is scheduled to release second-quarter results on Aug. 5. The Zacks Consensus Estimate for LCID's to-be-reported quarter's revenues is pegged at $253.4 million. The EPS and revenue estimates imply year-over-year growth of 26.4% and 24.1%, respectively. Lucid surpassed earnings estimates in one of the trailing four quarters and missed thrice, with the average negative surprise being 6.13%. Lucid Group, Inc. Price and EPS Surprise Lucid Group, Inc. price-eps-surprise | Lucid Group, Inc. Quote American Axle: American Axle is advancing in the electric drive space, with its Inovance collaboration boosting electrification revenues. Its expanding electrification portfolio strengthens its market position. As the shift toward electrification occurs, AXL leads with advanced electric propulsion technology. Key launches, including a high-performance eDrive unit for a premium European OEM and electric powertrain components for pickups and commercial trucks, drive growth. American Axle's efforts to optimize its portfolio via buyouts and divestitures bode well. The acquisition of Metaldyne Performance Group has widened American Axle's operating scale, customer base and end markets. During the first quarter, the company exited its Hefei and Liuzhou AAM automotive joint ventures in China, generating approximately $30 million in cash. AXL's impending deal to sell its commercial vehicle axle business in India, expected to be completed by the end of the second quarter of 2025, will help the company to sharpen its focus on ICE, hybrid and fully electric applications across passenger cars, pickup trucks/SUVs and vans Axle has an Earnings ESP of +17.59% and carries a Zacks Rank #3 at present. The company is scheduled to release second-quarter results on Aug. 8. The Zacks Consensus Estimate for AXL's to-be-reported quarter's earnings and revenues is pegged at 13 cents and $1.51 billion, respectively. American Axle surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 591.25%. American Axle & Manufacturing Holdings, Inc. Price and EPS Surprise American Axle & Manufacturing Holdings, Inc. price-eps-surprise | American Axle & Manufacturing Holdings, Inc. Quote 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 Cummins Inc. (CMI) : Free Stock Analysis Report American Axle & Manufacturing Holdings, Inc. (AXL) : Free Stock Analysis Report Lucid Group, Inc. (LCID) : Free Stock Analysis Report Rivian Automotive, Inc. (RIVN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Se produjo un error al recuperar la información Inicia sesión para acceder a tu portafolio Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información Se produjo un error al recuperar la información
Yahoo
05-06-2025
- Business
- Yahoo
Guide to Aerospace & Defense ETFs
Amid escalating geopolitical tensions, global defense spending reached an all-time high of$2,.72 trillion in 2024, according to the Stockholm International Peace Research Institute (SIPRI). This marks a 9.4% year-over-year increase—the sharpest annual rise since the Cold War era. The top five spenders—the United States, China, Russia, Germany and India—accounted for 60% of the global defense budget, reflecting a high concentration of military outlays. U.S. military expenditure grew by 5.7%, reaching $997 billion and accounting for 37% of total global defense spending. Note that global defense spending tends to remain resilient in the coming days — even during tariff-led economic downturns — due to ongoing geopolitical tensions, government commitments, and national security priorities. Let's delve a little deeper. Total S&P 500 earnings for the June quarter are expected to be up +5.5% from the same period last year on +3.8% higher revenues. However, there have been pressures on estimates as tariff threats have led companies and analysts to guide lower. Q2 earnings estimates for 15 of the 16 Zacks sectors are down since the quarter got underway, with Aerospace as the only sector whose estimates have moved higher, as quoted on Earnings Trend issued on May 28, 2025. All S&P 500 aerospace companies have reported earnings results so far. Earnings of the aerospace sector grew 23.2% in Q1 with 85.7% beat ratio while revenues nudged up 0.2% with a beat ratio of 71.4%. Defense spending by European Union (EU) member states is set to increase significantly in the next two years. Goldman Sachs expects the EU to gradually increase its annual defense spending by around €80 billion ($84 billion) by 2027—equivalent to roughly 0.5% of GDP, according to the report dated Feb. 27. Defense expenditures in the euro area accounted for 1.8% of GDP in 2024 and Goldman Sachs Research expects them to rise to 2.4% by 2027. Germany's military spending jumped 28% to $88.5 billion in 2024, becoming the world's fourth-largest. Sweden, in its first year as a NATO member, hiked defense spending by 34% to $12 billion. Poland increased its budget by 31% to $38 billion. Amid growing security concerns, global defense spending has been rising since Russia's invasion of Ukraine. Following Russia's invasion, Europe significantly increased its purchases of military equipment from non-EU suppliers. Despite this, larger EU nations have traditionally relied on domestic companies for defense procurement. Europe's share of global arms production, fell between 2008 and 2016, but has picked up since then. All 32 NATO members increased defense budgets in 2024, according to SIPRI, with 18 countries meeting or topping the bloc's 2% of GDP target. Military spending has also surged amid renewed U.S. pressure, with Trump urging NATO to hike defense outlays to 5% of GDP. He also warned of a possible U.S. troop withdrawal from Europe if the bloc fails to meet the higher targets. With military budgets rising worldwide, defense and aerospace stocks are gaining strong traction among investors. Several companies in this sector have posted substantial returns across various timeframes. The Zacks Aerospace-Defense industry is housed within the broader Zacks Aerospace sector. It currently carries a Zacks Industry Rank #50, which places it in the top 20% of more than 250 Zacks industries. Meanwhile, the aerospace sector carries the best Zacks Sector Rank #1. iShares U.S. Aerospace & Defense ETF ITA The Dow Jones U.S. Select Aerospace & Defense Index measures the performance of the aerospace and defense sector of the U.S. equity market. The fund charges 40 bps in fees. Invesco Aerospace & Defense ETF PPA The underlying SPADE Defense Index is comprised of approximately 50 U.S. companies whose shares are listed on a U.S. Exchange. These are companies that are principally engaged in the research, development, manufacture, operation and support of defense, military, homeland security and space operations. The fund charges 57 bps in fees. SPDR S&P Aerospace & Defense ETF XAR The underlying S&P Aerospace & Defense Select Industry Index represents the aerospace & defense sub-industry portion of the S&P Total Stock Market Index. The fund charges 35 bps in fees. Global X Defense Tech ETF SHLD The underlying Global X Defense Tech Index seeks to provide exposure to defense technology companies. The fund is heavy on the United States (51.3%), Britain (11.8%) and Germany (10%). The fund charges 50 bps in fees. Select STOXX Europe Aerospace & Defense ETF EUAD The underlying STOXX Europe Total Market Aerospace & Defense Index tracks the performance of stocks of Europe-based aerospace and defense companies. The fund charges 50 bps in fees (read: 6 Factors to Play Europe ETFs Now). First Trust Indxx Aerospace & Defense ETF MISL The underlying Indxx US Aerospace & Defense Index consists of a universe of U.S. companies engaged in business activities associated with certain aerospace and defense sub-themes. The fund charges 64 bps in fees. Themes Transatlantic Defense ETF NATO The underlying Solactive Transatlantic Aerospace and Defense Index identifies aerospace and defense companies headquartered in North Atlantic Treaty Organization member countries. The fund charges 35 bps in fees. U.S. Global Technology and Aerospace & Defense ETF WAR The U.S. Global Technology and Aerospace & Defense ETF provides investors access to the global defense sector, including companies in Aerospace & Defense, Semiconductors, Cybersecurity, Data Centres, and Homeland Security from around the world. The fund charges 60 bps in 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 Global X Defense Tech ETF (SHLD): ETF Research Reports iShares U.S. Aerospace & Defense ETF (ITA): ETF Research Reports Invesco Aerospace & Defense ETF (PPA): ETF Research Reports SPDR S&P Aerospace & Defense ETF (XAR): ETF Research Reports First Trust Indxx Aerospace & Defense ETF (MISL): ETF Research Reports Themes Transatlantic Defense ETF (NATO): ETF Research Reports Select STOXX Europe Aerospace & Defense ETF (EUAD): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research
