Auto giant Ford Motor Company (F) recorded $40.19 billion in total revenues, up 50.2% year-over-year for the second quarter ended June 30, 2022. However, its credit revenue came in at $2.26 billion, down 13.3% year-over-year. Moreover, analysts expect F’s EPS to decline 6.3% year-over-year to $1.95 in 2023.
F’s shares have slumped 29.4% year-to-date and 9.4% over the past month to close the last trading session at $14.68.
On the other hand, the auto industry continues to witness stable demand. In North America, light vehicle sales surged 3.9% year-over-year in August. Moreover, according to Maximize Market Research, the automotive market is projected to grow at a CAGR of 13.2% from 2022 to 2029.
Thus, investors looking to invest in auto stocks could consider buying fundamental solid stocks Volkswagen AG (VWAGY), Honda Motor Company, Ltd. (HMC), and Isuzu Motors Limited (ISUZY) before F.
Volkswagen AG (VWAGY)
Headquartered in Wolfsburg, Germany, VWAGY manufactures and sells automobiles primarily in Europe, North America, South America, and Asia-Pacific. The company has four segments: Commercial Vehicles; Power Engineering; Financial Services; and Passenger Cars and Light Commercial Vehicles.
VWAGY’s sales revenue came in at €69.54 billion ($69.29 billion) for the second quarter of 2022, up 3.3% year-over-year. Moreover, the company’s cash flow from investing activities came in at €7 billion ($6.97 billion), up 48.6% year-over-year.
Street expects VWAGY’s revenue to increase 7.8% year-over-year to $300.64 billion in 2023. Its EPS is expected to increase marginally year-over-year to $3.67 in 2023. VWAGY’s shares lost marginally intraday to close the last trading session at $19.64.
VWAGY’s strong fundamentals are reflected in its POWR Ratings. The stock’s overall A rating is a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
VWAGY has a B grade for Value, Sentiment, Quality, and Stability. It is ranked #2 out of 65 stocks in the Auto & Vehicle Manufacturers industry.
Beyond what is stated above, we’ve also rated VWAGY for Momentum and Growth. Get all VWAGY ratings here.
Honda Motor Company, Ltd. (HMC)
Headquartered in Tokyo, Japan, HMC develops, manufactures, and distributes motorcycles, automobiles, power products, and other products in Japan, North America, Europe, Asia, and internationally. Its four segments are Motorcycle Business; Automobile Business; Financial Services Business; and Life Creation and Other Businesses.
On August 29, 2022, HMC and LG Energy Solution announced their joint venture to spend $4.40 billion to produce lithium-ion batteries in the U.S. The collaboration should boost HMC’s North American market position.
Furthermore, on July 14, 2022, American HMC signed a multi-year agreement with Kyndryl Holdings, Inc. (KD), the world’s largest IT infrastructure services provider. KD will assist the company in infrastructure advancement.
HMC’s sales revenue came in at ¥3.83 trillion ($26.72 billion) for the first quarter ended June 30, 2022, up 6.9% year-over-year. Moreover, the company’s motorcycle sales came in at 4.25 million units, up 9.6% year-over-year. Also, its cash and cash equivalents came in at ¥3.63 trillion ($25.32 billion), up 45% year-over-year.
HMC’s revenue is expected to increase 339.4% year-over-year to $117.37 billion in 2023. Its EPS is expected to increase 17.7% year-over-year to $3.23 in 2023. Over the past three months, the stock has gained 2.3% to close the last trading session at $24.79.
HMC’s overall B rating equates to a Buy in our POWR Ratings system. It has an A grade for Value and a B for Quality and Stability. The stock is ranked #9 in the same industry. We’ve also rated HMC for Momentum, Sentiment, and Growth. Get all HMC ratings here.
Isuzu Motors Limited (ISUZY)
Headquartered in Tokyo, Japan, ISUZY manufactures and sells commercial vehicles, light commercial vehicles, and diesel engines and components worldwide.
ISUZY’s sales revenue came in at ¥688.20 billion ($4.80 billion) for the first quarter ended June 30, 2022, up 23% year-over-year. Also, its gross profit came in at 129.63 billion ($0.90 billion), up 17.2% year-over-year.
Moreover, the company’s total assets came in at ¥2.93 trillion ($20.44 billion) for the period ended June 30, 2022, compared to ¥2.86 trillion ($19.95 billion) for the period ended March 31, 2022.
ISUZY’s revenue to increase 149.4% year-over-year to $21.44 billion in 2023. Over the past three months, the stock has gained 5.8% to close the last trading session at $12.53.
It’s no surprise that ISUZY is rated Strong Buy in our POWR Ratings system. It also has a B grade for Value, Sentiment, Quality, and Stability. The stock is ranked #6 in the Auto & Vehicle Manufacturers industry. We’ve also rated ISUZY for Momentum and Growth. Get all ISUZY ratings here.
VWAGY shares were trading at $19.65 per share on Friday afternoon, up $0.01 (+0.05%). Year-to-date, VWAGY has declined -30.91%, versus a -18.44% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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