Barclays on U.S. Autos & Auto Parts: August Preview: More of a Stall Than a Double Dip
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8 Buy, 7 Hold, 0 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays on U.S. Autos & Auto Parts: August Preview: More of a stall than a double dip
Barclays analyst says, "August sales appear just stalled, even as the market moved to price in a double dip. Earlier this week, we noted the market had begun to price in a 45-50% probability of a double dip (which has likely since improved to about a 40-45% probability) - yet sales for August appear to be tracking to 12.1 mn, consistent with the stall scenario, with retail sales likely in the 9.9 mn SAAR range. While this is encouraging for an optimistic longer term view of the stocks, a stalled August is likely to do little to dispel concerns of a deeper fall later in the year, and hence auto stocks are likely to remain a macro trade, in our view."
"Toyota (NYSE: TM) and Honda (NYSE: HMC) still appear to be dragged down by low inventories. On a y-o-y basis, we expect Toyota lost 230 bp of share and Honda 240 bp as inventories remained well below 2010 levels, both in term of units and day sales. Nissan (Nasdaq: NSANY), the Koreans and the Detroit Three (GM (NYSE: GM) & Ford (NYSE: F)) continued to pick up much of that share and should outperform the rest of the industry."
"...Overall, August seems consistent with our belief that the U.S. SAAR is roughly stalled at 12.7 mn adjusting for quake impacts, and that deferred purchases (both retail and fleet) would lift sales later in the year above 13 mn even with a stalled consumer. While macro indicators suggest a weakening environment, we believe a 4Q11 rebound in SAAR to roughly a 13.3 mn run rate is still possible even if the consumer remains stalled with a 'baseline demand' only running at 12.7 mn."
Barclays analyst says, "August sales appear just stalled, even as the market moved to price in a double dip. Earlier this week, we noted the market had begun to price in a 45-50% probability of a double dip (which has likely since improved to about a 40-45% probability) - yet sales for August appear to be tracking to 12.1 mn, consistent with the stall scenario, with retail sales likely in the 9.9 mn SAAR range. While this is encouraging for an optimistic longer term view of the stocks, a stalled August is likely to do little to dispel concerns of a deeper fall later in the year, and hence auto stocks are likely to remain a macro trade, in our view."
"Toyota (NYSE: TM) and Honda (NYSE: HMC) still appear to be dragged down by low inventories. On a y-o-y basis, we expect Toyota lost 230 bp of share and Honda 240 bp as inventories remained well below 2010 levels, both in term of units and day sales. Nissan (Nasdaq: NSANY), the Koreans and the Detroit Three (GM (NYSE: GM) & Ford (NYSE: F)) continued to pick up much of that share and should outperform the rest of the industry."
"...Overall, August seems consistent with our belief that the U.S. SAAR is roughly stalled at 12.7 mn adjusting for quake impacts, and that deferred purchases (both retail and fleet) would lift sales later in the year above 13 mn even with a stalled consumer. While macro indicators suggest a weakening environment, we believe a 4Q11 rebound in SAAR to roughly a 13.3 mn run rate is still possible even if the consumer remains stalled with a 'baseline demand' only running at 12.7 mn."
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