We wanted to flag a few highlights in today's (08/15/19) Wolfe Research Auto Daily....
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Uber: Good results, optics get better in 2nd half
An IPO bonus paid to drivers made headline revenue growth look very weak. But adjusted for this one-timer, revenue growth was above the Street and all key metrics improved vs Q1, including margin which benefited from broad-based cost leverage. Looking forward, we expect Uber’s revenue growth to accelerate and Lyft’s to decelerate in the back-half.
A good print relative to other suppliers... but we’re not convinced that MGA is out of the woods
MGA reported a slight beat relative to consensus expectations and only a modest cut to guidance, which was a positive in the context of what we've seen from other suppliers. We dug into the numbers and are not convinced MGA is out of the woods.
GM and F pricing to protect pickup share in July
FCA took pickup share in June. GM and F took it back in July. We investigated the underlying incentive activity driving these moves.
Adjusted for the one-time “driver appreciation bonus”, 2Q revenue was $3.46bn (vs cons of $3.32bn) and EBITDA was -$656mln (vs cons of -$990mln). The company also initiated guidance of $64bn-$66bn Bookings (vs cons of $66.0bn) and EBITDA of -$3.2bn-$3.0bn (14% better than -$3.6bn cons). Shares were down 6% after-hours (after rising 8%+ during the day) …we’d expect that to improve as investors dig through details. On a sequential basis, 57% of revenue growth dropped to the bottom-line, which is impressive.
What to Watch for Ahead of Uber’s 2Q Earnings
Uber reports 2Q results after the close Thursday. Risk/reward skews a bit positive in our view given the recent sell-off and that we think mgmt commentary implied flat to slight reduction in 2Q EBITDA losses vs 1Q, above current consensus. We outline what else to watch for off the print.
Tenneco posted a decent quarter, and opened the door to a potential catalyst
While Tenneco’s numbers were down yoy, they were nonetheless better than expected. And the company opened the door to strategic options for its most valuable assets. TEN’s shares rallied 15%.
MGA Preview – NA Mix a Headwind in the quarter; still see downside to 2020 FCF
MGA reports Q2 before market open Thursday. We see modest downside risk due to weaker than expected production on key NA platforms. But we are more focused on factors that can help frame the outlook for 2020. Mgmt has guided to higher cash generation next yr. We’ve been bracing for pressure.
China cash crunch?
A number of investors have recently asked us about our 2020 expectations for China and at this point we don’t have a high conviction answer. We note several interesting developments within.
What’s the biggest risk for US OEMs?
We’ve been asked what could potentially set back our relatively bullish thesis on the U.S. OEMs (and GM in particular). In our minds the biggest risk is increasing capacity in the pickup truck market. The large pickup truck market still looks ok but we see risk to mid-size trucks.
McDonald’s – DoorDash partnership highlights competitive risks but we still see strong US growth for Uber Eats
We analyze what McDonald’s announced partnership with DoorDash means for Uber, and why we still see strong growth potential for Eats in the US.
GPC – Another EU blow up
Genuine Parts Company reported yesterday AM and missed on both Revenue (by 140bps) and EPS (by 4%), Europe was largely responsible.
We wanted to flag a few highlights in today's (07/15/19) Wolfe Research Auto Daily....
Thoughts on the Ford/VW partnership in AV and EV
This mitigates development cost for Ford (Argo will likely be de-consolidated). And it may signal a strategic shift.
Ford/VW Partnership has implications for Uber and Lyft
Initial deployments of AMOD are fairly near-term (12-24 months). This realization has forced a decision point for many automakers. Also worth noting… since AMOD doesn’t promise much value for the vehicle assembler (fairly low volume, low brand value of the car itself), they need to either own the network or own the self-driving hardware / software themselves to derive value.
Another Daimler profit warning…. but this one is different
Daimler issued another profit warning this week, citing worse market growth and slower new product launches. Veoneer, Magna, Lear, and Delphi could have some exposure.
We wanted to flag a few highlights in today's (06/12/19) Wolfe Research Auto Daily....
Recent indicators support our overall view on Uber and Lyft
We highlight 3 key datapoints relevant to UBER and LYFT, including NYC ridership trends (which indicated a sharp slowdown for Lyft), AMZN’s recent exit from US food delivery, and news of Uber integrating Eats into its main app.
NIO – Launch of NIO Pilot is important
NIO Pilot (Level 2+ semi-autonomous system) is ready to launch. This is an opportunity for NIO to raise its profile with consumers through advanced technology.
KAR – Tackling the key issues into the spin
We are hosting a KAR webinar today at 10 30AM (and are joined by Wolfe’s Chief Investment Strategist – Chris Senyek) to discuss the key issues into the spin. Click here to sign up and to download the slides.
Canalys 1Q19 ADAS penetration data reflects strong growth ... and room for more
We analyzed 1Q19 ADAS penetration data for the US and Europe… which reflects the expansion of lower level ADAS into non-luxury offerings and rapid growth of higher level features in the luxury segment. Our key takeaways are detailed within.
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