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Auto suppliers surge on strong results

Auto suppliers surge on strong results & signs of reopening

Auto suppliers surge on strong results

Shares of car-parts suppliers rallied after stronger-than-expected results suggest the companies may be doing better than feared amid the challenges posed by the coronavirus pandemic.

American Axle, Lear and Tenneco were among the biggest gainers in the sector after all three reported first-quarter results that impressed investors and analysts, though concerns about the second quarter persist. Shares also received a boost on news that manufacturers in Michigan and California may resume operations in the coming days. (Buy new Car right now)

The S&P Supercomposite Auto Components Industry Index gained as much as 6.2%, while the S&P 500 Index rose 1.5%. Valuations in the sector had suffered significantly this year, as investors worried about a sharp decline in car sales and production as people were advised to stay home in order to curb the spread of the Covid-19 infection.

Shares of axle, drive shaft and chassis components maker American Axle soared 43%, with Credit Suisse analyst Dan Levy saying the results significantly exceeded expectations and arguably demonstrated a “more resilient business model than perceived.”

As expected, several of the suppliers withdrew their forecast for the year, citing heightened uncertainty due to the virus outbreak.

 

 

 

 

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Source: Bloomberg

 

 

 

 

 

 

Deepika Chauhan

Hello, I am Deepika Chauhan an automobile enthusiast. Presently working as a Media Manager and Writer. My aim is to guide and teach ways to manage, grow and scale business.
Earlier, I have been a part of Asian News International (ANI) as a Sub-editor cum Producer.

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