| Stock | Price | 52 Week Range | Marketcap | EPS | Dividend Yield | Chart (24H) | Sector | Employees | Last Updated |
|---|---|---|---|---|---|---|---|---|---|
| $199.19 | 259.61B | 22.01 | 3.47% | Consumer Cyclical | 383,853 | 14 hours ago | |||
 Ferrari N.V. RACE | $468.42 | 84.30B | 10.35 | 0.72% | Consumer Cyclical | 5,478 | 14 hours ago | ||
 Stellantis N.V. STLA | $9.77 | 28.93B | 0.93 | 7.88% | Consumer Cyclical | 248,243 | 14 hours ago |
At the moment, investing in auto stocks might seem counterintuitive given the high levels of inflation and borrowing costs, coupled with a softening labor market. However, the auto industry, particularly legacy manufacturers, may offer surprisingly positive investment opportunities. And with the impending election likely to stir significant changes in industry regulations, the time is ripe to look into auto stocks that can weather the storm and come out on top.
Political Landscape and Market Dynamics
A Contentious Political Arena
As we approach yet another contentious election cycle, the political landscape becomes increasingly relevant to investment decisions. Former President Donald Trump enjoys robust support from his base, but he’s deeply polarized among the broader electorate. On the other hand, Vice President Kamala Harris, relatively new to the limelight, represents another unknown.
A Trump administration could mean a rolling back of President Joe Biden’s green initiatives, including efforts to support the electric vehicle (EV) industry. Such a rollback could offer breathing room for traditional automakers, potentially making certain auto stocks highly attractive for bold investors looking for lucrative opportunities.
Top Stock Picks for Summer 2024
Editor's Note: Analysis and insight for this article were originally sourced from our friends at InvestorPlace.com
Toyota (NYSE: TM): Dominate the Hybrid Market and Fuel Your Portfolio
Toyota continues to prove its mettle, even in a challenging economic environment. Here’s why it stands as a compelling investment:
Investment Appeal:
- Hybrid Vehicle Popularity: Toyota’s hybrid vehicles offer a “best-of-both-worlds” approach, enjoying robust sales due to their balance of fuel efficiency and infrastructure compatibility. As Reuters recently highlighted, the company has been benefiting from sales of its hybrids, a trend likely to continue amidst economic uncertainties.
- Established Market Presence: Dominating major markets like the U.S. and Europe, Toyota maintains a strong foothold despite some sales declines in Japan and China. The broader trends show consumers haven’t entirely shifted towards EVs, underlining the steady demand for hybrids.
- Political Dynamics: Potential rollbacks of EV incentives could stabilize the market for traditional and hybrid vehicles, giving Toyota an edge.
- Current Valuation Opportunity: Recent corrections have made Toyota’s stock more affordable. This presents an ideal opportunity to invest in a stable and well-established auto brand at a lower price point.
Source: josefkubes / Shutterstock.com
Analyst Ratings and Forecasts:
| Category | Rating/Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $144.14 |
| Potential Gain | 14.1% |
| Number of Ratings | 13 |
Analysts have a positive outlook on Toyota Motor Corporation, with a consensus rating of Overweight. The average price target of $144.14 suggests a potential gain of 14.1% from the current price. Most analysts believe that Toyota’s strong brand reputation, diverse product lineup, and solid financial performance will drive growth in the coming years.
By focusing on hybrids, Toyota allows consumers to enjoy the efficiencies of both gasoline and electric power, underscoring its robust market adaptability and long-term potential.
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Ferrari (NYSE: RACE): Luxury & Exclusivity Drive Unshakable Investments
Ferrari’s brand power and exclusivity provide a unique investment appeal beyond mere stock performance.
Investment Appeal:
- Luxury and Exclusivity: Ferrari’s luxury market positioning ensures that its consumer base is insulated from economic downturns. The clientele includes multimillionaires and billionaires who can afford the brand’s high price tags.
- Brand Strength: Ferrari occupies a unique space where owning one of its vehicles is more a status symbol than just a means of transportation. This elitism translates to economic stability.
- High Price Point: Although RACE stock commands high trading multiples (11.18X trailing-year sales), this reflects its premium market position and dependable revenue generation capabilities.
- Growth Projections: Analysts predict steady growth, with sales potentially reaching $7.62 billion by the end of 2025, up from $6.37 billion in 2023. This signifies ongoing robust demand in the high-end luxury vehicle market.
Source: Konstantin Egorychev / Shutterstock.com
Analyst Ratings and Forecasts:
| Category | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $243.14 |
| Potential Gain | 14.1% |
| Number of Ratings | 14 |
Analysts have a positive outlook on Ferrari, with a consensus rating of “Overweight” and an average price target of $243.14, indicating a potential gain of 14.1% from the current price. This suggests that analysts believe the stock has upside potential and is likely to outperform the market.
Ferrari’s brand strength and economic insulation offer a dependable investment regardless of market turbulence, making it a stable and lucrative option.
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Stellantis (NYSE: STLA): Diversity & Innovation for Game-Changing Returns
Stellantis offers diversity and innovation, despite being a riskier pick among auto stocks.
Investment Appeal:
- Diverse Brand Portfolio: With a range of popular brands like Chrysler, Dodge, Jeep, and luxury brands such as Alfa Romeo and Maserati, Stellantis captures a wide consumer base.
- Electric Dodge Charger: The launch of the world’s first electric muscle car, the electric Dodge Charger, merges traditional automotive values with modern electric capabilities. This could appeal to gearheads and eco-conscious consumers alike.
- Undervalued Stock: Currently, STLA trades at a low price-to-sales ratio (0.27X), suggesting significant upside potential if market conditions improve.
- Revenue Projections: Despite an expected 8% dip in sales for 2024, long-term projections indicate revenue could rise to $196.07 billion by 2025, with high-side estimates reaching $211.53 billion. This makes Stellantis an intriguing high-risk, high-reward investment.
Source: Jonathan Weiss / Shutterstock.com
Analyst Ratings and Forecasts:
| Metric | Value |
|---|---|
| Consensus Rating | Overweight |
| Average Price Target | $24.14 |
| Potential Gain | 24.1% |
| Number of Ratings | 14 |
Analysts have a positive outlook on Stellantis, with a consensus “Overweight” rating. The average price target of $24.14 suggests a potential gain of 24.1% from the current price. This optimism is likely driven by the company’s strong brand portfolio, including Jeep, Ram, and Peugeot, as well as its efforts to transition to electric vehicles and improve operational efficiency.
For the intrepid investor, Stellantis represents a dynamic bet with its blend of traditional brands and innovative electric offerings.
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By dissecting the current financial landscape and impending political shifts, we spotlight Toyota, Ferrari, and Stellantis as top auto stocks to monitor this summer. Despite the broader market turbulence, these legacy automakers offer strategic advantages through hybrid technology, luxurious brand strength, and cutting-edge electric innovation. Investors keen on political developments and consumer behavior trends should find these stocks particularly attractive for their portfolios this season.