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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
10-04-2025
- Business
- Yahoo
3 Dividend Paying Stocks From the Railroad Industry You Should Count On
Prospects of the Zacks Transportation - Rail industry's participants are being weighed down by challenges like tariff-induced economic uncertainties, persistent inflation and concerns pertaining to lingering supply-chain disruptions. Geopolitical woes represent further challenges. Most industry players are looking to drive their bottom line amid the headwinds through cost reduction. Partly due to these headwinds, the industry has declined 19.1% over the past year compared with the S&P 500 Index's 2.3% loss. The broader Zacks Transportation sector has plunged 27.3% in the said time frame. Image Source: Zacks Investment Research Despite the challenges surrounding the industry, some railroad companies, such as Union Pacific Corporation (UNP), Canadian National Railway Company CNI and Norfolk Southern Corporation NSC, have consistently paid dividends to their shareholders, thus highlighting their pro-shareholder stance. Dividend growth stocks generally belong to mature companies, which are less susceptible to significant market swings, and act as a hedge against uncertainty-induced stock market volatility as is the case currently. They offer downside protection with their consistent increase in payouts. Additionally, these companies generally have strong fundamentals, such as a sustainable business model, a long track of profitability, rising cash flows, good liquidity and a strong balance sheet. In order to choose some of the best dividend stocks from the aforementioned industry, we have run the Zacks Stock Screener to identify stocks with a dividend yield in excess of 2% and a sustainable dividend payout ratio of less than 60%. Each stock mentioned below presently carries a Zacks Rank #3 (Hold).You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Union Pacific: Headquartered in Omaha, NE, Union Pacific, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. Currently, UNP has a market capitalization of $125.84 billion. UNP pays out a quarterly dividend of $1.34 ($5.36 annualized) per share, which gives it a 2.55% yield at the current stock price. The company's payout ratio is 48% of its earnings at present. The five-year dividend growth rate is 7.92%. (Check Union Pacific's dividend history here). Union Pacific Corporation dividend-yield-ttm | Union Pacific Corporation Quote UNP has paid dividends on its common stock for 125 consecutive years, reflecting its pro-shareholder approach. Union Pacific's consistent initiatives to reward its shareholders through dividends and share repurchases look encouraging. In 2022, UNP paid dividends worth $3.16 billion and repurchased shares worth $6.28 billion. In 2023, the company returned $3.9 billion to its shareholders through dividends ($3.2 billion) and buybacks ($0.7 billion). During 2024, UNP paid $3.21 billion in dividends and repurchased shares worth $1.50 billion. Notably, management expects to buyback shares worth $4.0-$4.5 billion in 2025. Canadian National: Based in Montreal, Canada, Canadian National is involved in the rail, intermodal, trucking, and marine transportation and logistics business in Canada and the United States. Currently, CNI has a market capitalization of $68.35 billion. CNI's quarterly dividend leads to $2.44 per share (annualized), which gives it a 2.58% yield at the current stock price. This company's payout ratio is 46% of its earnings at present. The five-year dividend growth rate is 7.97%. (Check Canadian National's dividend history here). Canadian National Railway Company dividend-yield-ttm | Canadian National Railway Company Quote CNI's consistent efforts to reward its shareholders via dividends and buybacks are encouraging and highlight the company's financial strength. In 2022, CNI paid dividends of C$2.00 billion and repurchased shares worth C$4.71 billion. In 2023, CNI paid dividends of C$2.07 billion and repurchased shares worth C$4.55 billion. During 2024, CNI paid dividends of C$2.14 billion and repurchased shares worth C$2.60 billion. Norfolk Southern: Headquartered in Atlanta, GA, Norfolk Southern engages in the rail transportation of raw materials, intermediate products and finished goods in the United States. Currently, NSC has a market capitalization of $51.30 billion. NSC pays out a quarterly dividend of $1.35 ($5.40 annualized) per share, which gives it a 2.60% yield at the current stock price. This company's payout ratio is 46% of its earnings at present. The five-year dividend growth rate is 9.44%. (Check Norfolk Southern's dividend history here). Norfolk Southern Corporation dividend-yield-ttm | Norfolk Southern Corporation Quote Norfolk Southern's consistent initiatives to reward its shareholders look encouraging. During 2024, NSC paid dividends worth $1.22 billion. In 2023, the company paid dividends worth $1.23 billion and repurchased and retired common stock worth $622 million. During 2022, Norfolk Southern paid dividends worth $1.17 billion and repurchased and retired common stock worth $3.11 billion. Buybacks not only reduce the total outstanding share count, thereby increasing earnings per share but also signal management's belief in the intrinsic value of the stock. Such shareholder-friendly moves indicate the company's commitment to creating value for shareholders and underline its confidence in its business. 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 Union Pacific Corporation (UNP) : Free Stock Analysis Report Canadian National Railway Company (CNI) : Free Stock Analysis Report Norfolk Southern Corporation (NSC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
