Morningstar

Good Numbers U.S. Automakers

We remain concerned about possible tariffs on imported vehicles, but for now, the U.S. auto industry looks healthy to us.

Securities In This Article
Ford Motor Co
(F)
General Motors Co
(GM)

Automakers reported June 2018 U.S. light-vehicle sales that got help from an extra selling day this June. The seasonally adjusted annualized selling rate came in at 17.47 million, compared with 16.72 million in June 2017. Total sales came in at 1.55 million, a 5.2% increase from June 2017; however, we calculate a 1.3% rise after adjusting for the extra selling day. We think the industry had a good month and the trend toward light trucks over cars continues. Ford's U.S. sales head Mark LaNeve said on the July 3 Ford call there is no sign of stabilization in the industry's car mix, which for total U.S. industry sales has been in the low-30% range this year.

The first-half 2018 results have the industry up 1.9%, but we calculate 0.6% growth after adjusting for two extra selling days so far. The full year will have one extra selling day. We remain concerned about possible tariffs on imported vehicles, but for now, the U.S. auto industry looks healthy to us. The mix shift to light trucks, especially crossovers, should help profits and the U.S. unemployment situation remains bright with the number of people unemployed having declined year over year for all but one month (Sept. 2016) starting in June 2010.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

More in Stocks

3 Dividend Stocks for October 2024

These three dividend payers have an average yield of more than 4.5%.
David Harrell

Consumer Defensives: Despite Angst, Thirsty Investors Have Names to Pursue

Estee Lauder, Kraft Heinz, and Dollar General are our top consumer defensive stocks.
Erin Lash, CFA

Industrials: Many Stocks Overvalued After Q3 Outperformance

Our top stocks in this sector are Chart Industries, Wesco, and CNH Industrial.
Brian Bernard, CFA, CPA

About the Author

David Whiston, CFA, CPA, CFE

Strategist
More from Author

David Whiston, CFA, CPA, CFE, is a strategist, AM Industrials, for Morningstar*. He covers stocks in the automotive industry, including dealerships, parts manufacturers, and automakers. He has covered the automotive industry since joining Morningstar in 2007. He writes stock reports, ad hoc reports, stock analyst notes, and builds discounted cash flow models for each company covered. He also assesses their economic moat and makes frequent television and print media appearances in local, national, and international news outlets. Key stocks covered include GM, Ford, CarMax, and all six publicly traded franchise auto dealers, such as AutoNation and Penske Automotive Group.

Before joining Morningstar in 2007, Whiston spent four years in PricewaterhouseCoopers’ New York real estate audit practice and one year in its Chicago office working on real estate acquisition due diligence, gaining experience around assessing an asset’s cash flow.

Whiston holds a bachelor’s degree in business administration with a concentration in accounting from the University of Richmond’s Robins School of Business. He also holds a master’s degree in business administration with concentrations in finance, economics, and organizational behavior from the University of Chicago Booth School of Business. He holds the Chartered Financial Analyst® designation, and he is a Certified Public Accountant and a Certified Fraud Examiner.

In 2012, he ranked first in the specialty retailers and services industry in The Wall Street Journal’s annual “Best on the Street” analysts survey. He ranked first in the same industry in 2011 .

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

Sponsor Center