巴克莱-美股-汽车与汽车零部件行业-美国汽车与汽车零部件更新：挑战逆向投资-14-44页.pdf
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Equity Research
4 January 2019
CORE
Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with
companies covered in its research reports. As a result, investors should be aware that the
firm may have a conflict of interest that could affect the objectivity of this report. Investors
should consider this report as only a single factor in making their investment decision.
PLEASE SEE ANALYST CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 38.
U.S. Autos and Auto Parts
UPDATE: Challenging to be contrarian
Update: This report corrects the worldwide sales and production forecasts table in Figure
14 and replaces " Challenging to be contrarian " published on 04-Jan-19 at 4:10 AM EST
It’s tempting to be contrarian for auto stocks going into 2019, but we’ll pass for
now. Not since the onset of the Great Recession have autos been so out of favor.
Autos were the worst performing sector in 2018, and valuations for both auto parts and
OEMs are at trough levels. And it’s not like the negative macro outlook is news at this
point – we expect China to continue its sharp decline (eventually leading to some
industry consolidation), some weakness in Europe and a modest erosion to US SAAR.
Nor are the pressures on the cost side – from commodities, tariffs, and technology
costs – unknown. With this backdrop, it’s tempting to see the stocks as oversold, but
with the threat of earnings revisions we maintain our Neutral sector view and prefer to
focus on some key ‘special situations’: GM, AXL and DAN. We also revise our price
targets and earnings forecasts for some of our coverage.
Contracting China auto sales, eroding NA plateau and stagnating EU demand sets up
a challenging production backdrop. We expect North America to enter an eroding
plateau in 2019 (LVP -0.2%), as higher interest rates and vehicle pricing impact
consumer demand. In Europe (LVP -0.1% for 2019) we expect WLTP headwinds to
continue through 1Q. Pushing past WLTP, we still see risk to normalized auto demand,
particularly in W. Europe as Brexit and broader political uncertainty remain unclear. We
estimate China LVP to be down -2.4%, in line with our view that the government
forgoes stimulus, driven by a desire for consolidation among the auto OEMs.
We see risk of further downward earnings revisions near term, while risk of US
recession at some point keeps investors away. For the short term, we note that
despite well-known macro pressures, further downside earnings revisions are likely.
Moreover, other than a modest rebound if/when China stabilizes (we expect in 2H,
partially due to easier comps), it’s difficult to see a sustained move up for the sector, as
investors worry that the US SAAR will be the next to roll over, and do not want to own
auto stocks, however cheap, in the face of future downward earnings revisions that
would dwarf those from China (which is, after all, only ~20% of most parts suppliers
revenues). Thus we maintain our Neutral sector view.
We believe that the ‘special situations’ in our coverage are worth closer looks.
GM offers a potential catalyst as it appears to be closer to spinning out Cruise.
Among the parts companies hit by operating and macro issues (DLPH, AXL, VNE
and ADNT), we believe that AXL (with little China exposure) has the clearest path to
recovery.
DAN has gone from being cheap to extremely cheap, despite being relatively
underexposed to China and Europe LV. While we understand the concerns over the
machinery cycle, we think DAN remains a strong value play and should have a
relatively strong guide for 2019.
SECTOR UPDATE
U.S. Autos & Auto Parts
NEUTRAL
Unchanged
For a full list of our ratings, price target and
earnings changes in this report, please see
table on page 2.
U.S. Autos & Auto Parts
Brian A. Johnson
+1 212 526 5627
brian.a.johnson@barclays.com
BCI, US
Steven Hempel, CFA
+1 312 609 7260
steven.hempel@barclays.com
BCI, US
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