The Covid-19 era has ended (or so we hope), so it’s time to forget about the masks, get behind the wheel of a shiny car, set off on a journey… and spend a fortune on gasoline. For those of you who thought that the pandemic was the worst disaster, think again. We are sandwiched in between the post-Covid situation, which is a good factor, and the energy crisis invading the world, which is a negative aspect. In this article, we will try to find out what is stronger – the support or the pressure – and look through the auto stocks which have positive consensus forecasts.
The Covid-19 pandemic blew down most of the stock markets, and the shares of car manufacturing companies were no different. Take a look at the chart below listing auto stocks – Stellantis, General Motors, Volkswagen and Fisker.
Disclaimer: we will talk about Tesla and Rivian a bit later. The reason why we didn’t add them to the chart is because Tesla’s booms and busts are too dramatic, largely caused by the company’s internal and external issues, as opposed to being affected by global affairs. Additionally, Rivian undertook an IPO quite recently in 2021.
If you want to make your own lists of stocks, you can do so with the help of Stock Screener using multiple parameters (or just a few, if you wish).
As you can see, all the stocks were going roughly in the same direction – a sudden sharp drop at the beginning of the pandemic, step-by-step hikes fueled by any and all positive pieces of news related to the Covid-19, and a slow decrease in line with the world markets caused by the crisis we still find ourselves in. It’s important to understand that the pandemic is not only about some local restrictions dealing with staying at home, maintaining social distance, inability to freely visit restaurants, gyms, stores and many other places which we took for granted in the pre-pandemic world. This is much bigger than that. It’s a planet wide concern, giving us supply disruptions, a deficit of the necessary for car manufacturers chips, and a decline in demand.
For now, the situation with supply chains and chips has improved, but in return we got the energy crisis and a high probability of recession in many corners of the world. In addition, the significant trend that speaks in favor of car stocks in the near future is an expansion of electric cars range presented by classic car manufacturers – it may bring new opportunities for sales growth.
In any case, it’s hard to predict which factors will be more significant for the auto industry – especially when the recent years have been so insane and don’t give a chance to make wild guesses about the economical and geopolitical situation. But we have a list of auto stocks that can probably show good results in 2023 according to analyst forecasts.
Rivian, an electric vehicle manufacturer from the US. The average forecast is +139% in the next 12 months.
Fisker, a manufacturer of eco-friendly electric vehicles. The average forecast is +78% in the next 12 months.
Tesla, needs no introduction really. The average forecast is +64% in the next 12 months.
Stellantis, a carmaker behind many well-known brands such as Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Jeep, Opel, Peugeot, etc. The average forecast is +41% in the next 12 months.
Volkswagen, a well-known German car manufacturer. The average forecast is +36% in the next 12 months.
General Motors, an automotive manufacturer owning such brands as Chevrolet and Cadillac. The average forecast is +29% in the next 12 months.
Of course, all these percentages of potential growth appeared here thanks to professional analysts. However, there’s no guarantee that these forecasts will manifest in reality. That’s why you should do your own research before buying or selling any assets.