Barclays on U.S. Autos & Auto Parts: Sept. Sales Top 13M but Market Implied Growing Double-dip Concerns
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Up: 11 | Down: 14 | New: 51
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Barclays on U.S. Autos & Auto Parts: September sales top 13mn but market implied double-dip concerns grow
Barclays analyst, Brian A. Johnson, said, "US sales of light vehicles improved markedly to a 13.1mn unit SAAR (seasonally adjusted annual rate), (versus last month at 12.1mn SAAR; consensus was 12.8mn), better than a stall scenario, with retail sales likely in the 10.2mn SAAR range. This represents an 11% increase in SAAR from September 2010 (which had an 11.8 mn SAAR). Nevertheless, investors still appear focused on mid-term macro concerns; the stronger than expected sales month did not appear to help the auto sector breakout from its high macro market correlation."
"Light trucks drove outperformance at the Big Three. GM's September sales
performance came in slightly above our expectations, with sales higher by 19.7% y-o-y, well ahead of our expectations for a 17.4% increase and slightly ahead of consensus of 19%. Much of the outperformance was driven by strong truck sales; light trucks increase by 23.4% (vs. our expectation of 16%). In particular, GM's full-size pickup Sierra/Silverado sales increased by 33% y-o-y, while its large and luxury SUVs were higher by 60% y-o-y - making us more than comfortable with GM's year-end targets for GMT 900 inventories (which dipped to 88 days for large pickups)."
"Market continues to price in a significant and increasing probability of a double-dip. While sales for September were 300,000 above our and consensus estimates of 12.8mn the market appears to be continuing to price in a significant (and increasing) risk of a double dip. We see a 56% implied probability of a double dip, up from 12% at the end of July. Notably, Dana (NYSE: DAN), Lear (NYSE: LEA) and Tenneco (NYSE: TEN), along with Meritor (NYSE: MTOR), are closest to having priced in a double dip, with implied double dip probabilities from our simple regression model of around 60-75%; of the OEMs GM (NYSE: GM) appears to be pricing in a higher, 54% probability of a double dip vs. Ford (NYSE: F) at 33%."
Other stocks of note include: Daimler (NYSE: DAI), Toyota (NYSE: TM), Honda (NYSE: HMC), Johnson Controls (NYSE: JCI) and American Axle (NYSE: AXL).
Barclays analyst, Brian A. Johnson, said, "US sales of light vehicles improved markedly to a 13.1mn unit SAAR (seasonally adjusted annual rate), (versus last month at 12.1mn SAAR; consensus was 12.8mn), better than a stall scenario, with retail sales likely in the 10.2mn SAAR range. This represents an 11% increase in SAAR from September 2010 (which had an 11.8 mn SAAR). Nevertheless, investors still appear focused on mid-term macro concerns; the stronger than expected sales month did not appear to help the auto sector breakout from its high macro market correlation."
"Light trucks drove outperformance at the Big Three. GM's September sales
performance came in slightly above our expectations, with sales higher by 19.7% y-o-y, well ahead of our expectations for a 17.4% increase and slightly ahead of consensus of 19%. Much of the outperformance was driven by strong truck sales; light trucks increase by 23.4% (vs. our expectation of 16%). In particular, GM's full-size pickup Sierra/Silverado sales increased by 33% y-o-y, while its large and luxury SUVs were higher by 60% y-o-y - making us more than comfortable with GM's year-end targets for GMT 900 inventories (which dipped to 88 days for large pickups)."
"Market continues to price in a significant and increasing probability of a double-dip. While sales for September were 300,000 above our and consensus estimates of 12.8mn the market appears to be continuing to price in a significant (and increasing) risk of a double dip. We see a 56% implied probability of a double dip, up from 12% at the end of July. Notably, Dana (NYSE: DAN), Lear (NYSE: LEA) and Tenneco (NYSE: TEN), along with Meritor (NYSE: MTOR), are closest to having priced in a double dip, with implied double dip probabilities from our simple regression model of around 60-75%; of the OEMs GM (NYSE: GM) appears to be pricing in a higher, 54% probability of a double dip vs. Ford (NYSE: F) at 33%."
Other stocks of note include: Daimler (NYSE: DAI), Toyota (NYSE: TM), Honda (NYSE: HMC), Johnson Controls (NYSE: JCI) and American Axle (NYSE: AXL).
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