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With solid advances in COVID-19 vaccination and significant economic growth this year, automakers saw significant sales growth in the first half of 2021. Given the global sustainability initiatives, the electric vehicle industry is expected to grow over an extended period of time. As a result, we believe the stocks of automakers Tesla (TSLA) and Stellantis (STLA), whose shares rose more than 6% in the past month, are well positioned to move higher. So let's discuss.
The electric vehicle (EV) industry is growing rapidly, supported by global zero-emission initiatives. The near-term outlook for the electric vehicle industry seems good, as governments around the world place great emphasis on accelerating the production and sales of electric vehicles in order to meet their sustainability goals. The electric vehicle market grew by more than 40% in 2020, with a record of 3 million registered electric vehicles.
In addition, worldwide sales of electric vehicles increased by around 140% year-on-year in the first quarter of 2021. And automakers are now focusing on expanding their product portfolios and ramping up production to meet rising demand. The International Energy Agency (IEA) expects the electric vehicle industry to experience “healthy growth” this decade.
The shares of two well-known players in the industry, Tesla, Inc. (TSLA) and Stellantis N.V. (STLA), have gained more than 6% in the past month and will continue to generate significant returns in the months to come.
Click here to view our Electric Vehicle Industry Report for 2021
Tesla, Inc. (TSLA)
TSLA in Palo Alto, California designs, develops, manufactures, rents and sells electric vehicles and power generation and storage systems worldwide. The company operates in two segments: Automotive and Energy Generation and Storage.
TSLA's total revenue increased 98% year over year to $ 11.96 billion for the second fiscal quarter ended June 30. Operating income increased 301% year over year to $ 1.31 billion, while non-GAAP net income increased 258. improved% year over year to $ 1.62 billion. Company's non-GAAP EPS rose 230% year over year to $ 1.45.
Analysts expect TSLA's revenue to grow 49.3% year over year to $ 13.10 billion in the current quarter through September 2021. A consensus EPS estimate of $ 1.38 for the current quarter indicates an 81.6% increase over the same period last year. TSLA also has an impressive earnings surprise story; it outperformed consensus EPS estimates for three of the past four quarters.
TSLA gained 6.5% last month, closing yesterday's trading session at $ 686.17. The share gained 107.8% in the past year.
Stellantis N.V. (STLA)
STLA, based in the Netherlands, develops, designs, manufactures and sells cars, pickups, SUVs and light commercial vehicles worldwide. It offers luxury, premium and mainstream vehicles, as well as financial services and parts and services, and also provides retail and dealer financing, leasing and rental services.
On July 6, STLA announced its investment in Vauxhall's manufacturing facility in Ellesmere Port, which will be STLA's first facility by the end of next year to produce an all-electric vehicle in both commercial and passenger car versions. This is in line with the UK government's decision to stop selling pure gasoline and diesel vehicles from 2030. The project is intended to bring the company significant returns around the world as part of sustainability initiatives.
In May, STLA and Hon Hai Precision Industry Co., Ltd. together with its subsidiary FIH Mobile Ltd. Experience of vehicle users. With this partnership, the company expects to push the boundaries of connected vehicle technology and offer its customers immersive digital experiences.
STLA net sales increased 270.2% year over year to EUR 72.61 billion ($ 85.55 billion) for the six months ended June 30. . Cash flow from operating activities for the period was 5.62 billion euros ($ 6.62 billion).
A consensus revenue estimate of 182.87 billion The Street expects the company's earnings per share to increase 202.8% year over year to $ 4.02 this year.
STLA gained 18.4% last month, closing yesterday's trading session at $ 21.68. The share has gained 32.8% in the past six months.
Click here to read our automotive industry report for 2021
TSLA stock fell $ 1.91 (-0.29%) in after-hours trading on Tuesday. Since the start of the year, TSLA is down -5.66%, compared to a 19.54% increase in the benchmark index S&P 500 over the same period.
About the author: Subhasree Kar
Subhasree's keen interest in financial instruments led her to pursue a career as an investment analyst. After completing her master's degree in economics, she gained knowledge of equity research and portfolio management at Finlatics.
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