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BenzingaEditorial

Pickups, SUVs and CUVs – The Bright Future of the Specialized Equipment Market

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Pickups, SUV News

Pickups form the largest share of the specialty equipment industry because they are simply a great platform for modification. The Specialized Equipment Market Association (SEMA) rated Ford Motor’s (NYSE:F) F Series as the most customizable truck and its majesty, Fiat Chrysler Automobiles’ (NYSE:FCAU) Jeep Wrangler as the winner of the SUV category. And besides providing valuable opportunities for customization, pickups have taken the throne from traditional passenger cars and they show no signs of stopping.

Pickups are on the throne – and they are bringing Workhorse Group Inc along!

There are 55.9 million registered pickups in the United States, making 20% of all vehicles on the road. Led by Ford F-150, there’s also quite a bit of Toyota Motor’s (NYSE:TM) Toyota Tundra. As for a snapshot of the accesorization subsegment, total specialty-equipment sales in 2018 amounted to $12.03 billion and made 27% of the specialty-equipment retail market. These products include, maintenance oil, wax and cleaning products, trailer and towing accessories but also exterior appearance upgrades, batteries and truck bed liners. People love to add big wheels to their pickups, enhance exterior appearance so those products also always tend to do well and logically, trailer and towing products are most commonly purchased by pickup owners. But it is truck beds that provide valuable opportunities that aren’t present with other vehicle segments for utility products, such as racks and toolboxes, plus liners and bed covers.

Speaking of truck beds, no wonder Workhorse Group Inc (NASDAQ:WKHS) has its hands full with the electric start-up company occupying its strongest position to-date, both operationally and financially. During its third quarter, the company signed several partnership deals to leverage its intellectual property while more than doubling its loss of a year ago from $5.5 million to $11.5 million due to higher interest expense.
The company recorded sales of $4,000 which is quite down from $11,000 in the same period last year, however despite the fact that the company delivered fewer trucks, it did so at higher prices due to making a transition to a new generation, causing its R&D prices to increase 13%. Workhorse received a non-dilutive 10% stake in Lordstown Motors which purchased the 6.2-million-square-foot plant from General Motors Co. (NYSE: GM) on Nov. 7. Also on a brighter note, the company’s balance sheet of September 30th shows cash and cash-equivalents amounting to $9.3 million compared to only $1.5 million on December 31, 2018.

Meanwhile, Franchise Holdings International Inc (OTC:FNHI)’ Worksport was just granted a third U.S. patent protecting its innovative covers that provide unique full-bed access for light trucks such as Ford F series. In September, the company received its second U.S. Patent Office trademark allowance, so now they have four in 2019 that add protection to its brand strategy. This innovative company is also looking to complete its Helios line with complimentary truck accessories able to transform sunlight into storable energy so that they can extend the driving range of forthcoming electric trucks. Worksport’s proprietary solar technology infused with its most advanced truck bed covers is more than a major breakthrough innovation, it represents an endless opportunity for future growth.

Pickup market outlook

The top pickups as far as accesorization goes are GM’s full-size pickups and surprise, Ford’s F series. But Toyota’s Tacoma and Tundra are on the list as well as Nissan Motor Co. (OTC:NSANY)’s Nissan Frontier. Of the roughly 56 million pickups in the United States today, nearly 60% of them are either GM Full-Size or Ford F-Series as these two models combined account for almost 12% of all vehicles on the road. GM and Ford’s market dominance is expected to continue with estimated additional 12 million trucks for 2026- speaking for a safe haven for the specialized car equipment industry! GM has 17.6 registered vehicles on the road with Ford following with 15.6 million. But, the rebirth of several mid-size models are also expected to provide an additional boost by bringing in new buyers, with Toyota and Nissan having quite a number of enthusiastic owners, creating a strong market for their specialty equipment. Great news for Toyota that is struggling to adapt to the ‘electrification’ era.

SUVs

With 36.7 million registered vehicles in the United States making 13% of all vehicles on US roads, top models are again led by Ford, and Ford Explorer to be exact. But then there’s Jeep taking second and third place, GM’s Chevrolet Tahoe, Toyota’s Toyota 4Runner, with Hyundai Motor Company (OTC:HYMTF) Kia Sorento taking 8th place and FCA’s Dodge Durango taking 9th place. But don’t worry about Fiat Chrysler Automobiles, as despite a miss on revenue targets, its stock gained 17.3% in October, mostly due to the good merger news with France’s Peugeout SA (OTC:PUGOY) which was announced on the same day of the earnings release.
The specialty equipment sales for the SUV segment amounted to $5.93 billion in sales in 2018, making 13% share of the market. While SUVs are not as versatile as pickups for accessorization, many owners upgrade their SUVs with utility parts and for off-roading as many SUVs topping the list are in fact often used to go off-the road.
But it is Jeep that dominates the after-market. The Jeep Wrangler is widely considered to be one of the most modified and versatile vehicles on the road today as nearly 40% of Jeep Wranglers are accessorized in some way, be it shape or form.

Crossovers are becoming more popular

Although a crossover (CUVs) are becoming more and more popular and their distinction is not always clear, they are a separate segment because SUVs are built on truck platforms whereas CUVs are built with unibody construction. With SUVs showing a long tenure, consumer interest is expected to continue in the coming years. They are more profitable for auto-manufacturers to make but there are economic factors like increased gas prices and uncertain economy could decrease consumer buying power. But when it comes to accessories, they will persevere for all those who wish to optimize their utility with a lot of specialty after-market upgrades.

CUVs

The fastest developing segment makes 17% of all vehicles on US roads amounting to 48.3 Million registered CUVs are being led with Honda Motor Co (NYSE:HMC)’s CR-V, the one and only model that crosses in between not being a true pickup nor an SUV, a true jewel for this ever evolving company. Then there’s of course, Ford Escape, Toyota RAV4, Chevrolet, Nissan, Subaru Forester and Jeep Cherokee. CUVs created 11% share of the specialized equipment market. Having outpaced even pickups, it is logical to assume consumers will turn to accessorizing CUVs like they do with SUVs. That being said, there are obstacles. The segment is fragmented as there are 120 models in operation and just as many models are expected to be sold in the future. As a consequence, it will be difficult to create products that will function across all platforms. The large number of platforms limits the opportunity for companies seeking to sell specialty parts as there is no clear single model that dominates the market. The Ford Escape and Toyota RAV4 lead the pack in terms of registrations having been out longer. However, there are many other CUVs close behind and all this diversity makes it challenging to focus on to a single model. The popularity of CUVs is not expected to subside soon but, many CUV models are relatively new and have little history with the accessorization market so there will be a challenge to decide which models to focus on. But one thing is certain, while the conventional car market continues showing signs of fatigue, pickups, SUVs and crossovers are booming- and show no signs of stopping. And even if this wasn’t case, there’s so still so much room in upgrading older models so all is bright for the specialized equipment industry when it comes to this segment. Worksport has its future guaranteed with its breakthrough solar technology that can surely disrupt the truck accessories market but Workhorse Group is also in for the ride once the company finishes its transition to the new generation as pickups are definitely here to stay.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

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BenzingaEditorial

This Week’s IPOs

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This week has eight scheduled IPOs with three billion-dollar deals coming from bio tech, diagnostics, software and solar equipment, among others.

Biotech

The US biotechnology company that received emergency approval from the FDA for its COVID-19 antibody and antigen tests, Ortho Clinical Diagnostics (NASDAQ: OCDX), plans to raise $1.5 billion at a $4.9 billion market cap. This pure-play in vitro diagnostics business provides diagnostic testing solutions. It is profitable on an EBIT basis, with a revenue retention rate of 99% in 2019.

Customer-survey software

Qualtrics International (NASDAQ: XM) seeks to raise as much as $1.46 billion. It provides a customer and employee experience management platform to over 12,000 organizations. But, despite its sticky customers, it operates in a highly competitive environment with low barriers to entry.

Solar equipment supplier

Shoals Technologies Group (NASDAQ: SHLS) designs and manufactures products used in large solar energy projects. It is a profitable and growing company that plans to raise $1.0 billion at a $3.6 billion market cap. However, its growth depends on international growth and its track record abroad is not impressive.

Asset-light container liner shipping company

Israel-based ZIM Integrated Shipping Services (NYSE: ZIM) plans to raise $306 million at a $2.1 billion market cap. This company positions itself as a global leader in niche markets with competitive advantages that allow it to maximize its profitability.

Mortgage

Residential mortgage producer Home Point Capital (NASDAQ: HMPT) plans to raise $250 million at a $3.0 billion market cap. It utilizes a wholesale mortgage origination channel to connect with nearly broker partners, which allows it to serve roughly 300,000 customers.

Asset management

Brazilian asset manager Vinci Partners Investments (NASDAQ: VINP) plans to raise $236 million at a $944 million market cap. Its portfolio includes private equity, public equities, real estate, credit, infrastructure, hedge funds, and investment products.

Supermarket portfolio

Southeastern Grocers (NYSE: SEGR) plans to raise $134 million (100% secondary) at a $725 million market cap. The company itself won’t sell any shares as part of the offering and will not receive any net proceeds from its public debut.

Agriculture

Agricultural technology company Agrify (NASDAQ: AGFY) plans to raise $25 million at a $115 million market cap. This company is highly unprofitable but fast growing. It aims to differentiate itself with a bundled solution of equipment, software, and services that is optimized for growth.

By the looks of it, the 2021 IPO market seems to be continuing 2020’s momentum.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

This Earnings Week Will Be a Busy One

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Apply (NASDAQ: AAPL), Facebook (NASDAQ: FB), Microsoft (NASDAQ: MSFT) and Tesla (NASDAQ: TSLA) are ready to report record sales this week, along with nearly a quarter of S&P 500 companies scheduled to release their earnings reports. It will also be a busy week, or more precisely a busy Tuesday, for the Dow with 3M (NYSE: MMM), Johnson & Johnson (NYSE: JNJ), American Express (NYSE: AXP) and Verizon (NYSE: VZ) joining Microsoft as fourth-quarter earnings season gets into full swing.

Tuesday

The chip saga continues with Advanced Micro Devices (NASDAQ: AMD) whose shares rose about 5% over the past week and are now up 1.2% year to date. Expectations are high due to its strong fourth quarter results and Intel Corporation’s (NASDAQ: INTC) upside guidance that was issued last week. Wall Street expects earnings of47 cents per share on revenue of $3.02 billion as it assumes the pandemic made a minimal disruption to its business with positive trends in the datacenter business and PC sales. AMD has steadily gained market share from Intel in both of these categories.

Microsoft will also report after the close with Wall Street expecting earnings of $1.64 per share on revenue of $40.18 billion. The trends of working and learning from home continue to intensify demands for Microsoft’s offerings, as evidenced by the strong Q4 demand. But its biggest strength over the past year has been the commercial cloud business and Wall Street remains strongly positive about the company’s outlook for fiscal 2021 due to Azure’s momentum as it’s revenue was up 48% on a YoY basis in the previous quarter. But, this is a slight deceleration from the 50% growth in Q4 and investors will want some evidence that both Azure and Microsoft’s Teams that competes against Zoom (NASDAQ: ZM) can continue fueling its revenues to new heights.

Wednesday

Apple will report after the close and Wall Street expects earnings of$1.40 per share on revenue of $102.76 billion. Holiday quarter is the quarter for Apple and it needs to meet these high expectations as last year’s quarter saw earnings of $1.25 per share on revenue of $88.5 billion. This quarter will be all about sales of the iPhone 12 that has been lauded as revolutionary. The iPhone 12 came with 5G capabilities and features such as its world-facing LIDAR sensor. However, Apple is about more than the iPhone as its services business now accounts for almost 22% of total revenue. Last quarter, its revenue surged to a new record of $14.5 billion.

Facebook will also report after the close with Wall Street expecting earnings of $3.19 per share on revenue of $26.34 billion. Facebook shares had an impressive run over the past week, suggesting that the concerns over digital advertising due to the pandemic have vanished. The social media giant topped consensus earnings expectations in each of the past eleven quarters and has missed earnings estimates just once over the past half of a decade. Yet, over the past year, its shares have been under-performing due to fears of regulatory and political risk. But if it shows a strong surge in daily and monthly active users with an upbeat revenue guidance, its stock should be just fine.

Tesla (NASDAQ: TSLA) will report its first quarter since it became part of the S&P 500 after the close. Wall Street expects earnings of$1.00 per share on revenue of $10.32 billion. Tesla’s shares are up 20% year to date and 99.9% since the company last reported earnings on October 21st, confirming that it is not showing any signs of slowing down. Elon Musk’s focus has been on executing the strategy that brought top and bottom-line improvements, while delivering almost half a million vehicles in 2020. Now, the electric vehicle pioneer has to show it intends to keep pressing the gas pedal.

Takeaway

A number of Republicans don’t support President Joe Biden’s $1.9 trillion new round of fiscal stimulus and have even criticized the price tag. Fortunately, mega tech companies that are reporting this week don’t depend on fiscal stimulus that much, as dar revenue and earnings growth is concerned.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

This Week Will Be About More Than Inauguration Day Alone

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Since 2020 March lows, the market saw a nothing short of extraordinary record-shattering rally. But how much higher can it go as COVID continues to rage across the US and Europe? That answer will become a bit clearer as traders have returned from the long holiday weekend and equity markets have reopened. This week will be defined by the first days of the Biden administration and by another batch of corporate earnings reports.

Inauguration in times of COVID-19

On Wednesday, president-elect Joe Biden’s inauguration ceremony will take place as a dialed-down event, due to the ongoing pandemic. Americans have been urged to avoid the city on the day, given the risk of violence surrounding the event. Last Wednesday, Airbnb (NASDAQ: ABNB) announced it would block and cancel reservations in the D.C. metro area this week, refunding guests and reimbursing hosts who already made bookings. Interestingly, the stock rallied nearly 6% upon the announcement. Marriott (NASDAQ: MAR) which has close to 200 hotels in the D.C. area and owns brands including The Ritz-Carlton said it would honor existing reservations, along with IntercontinentalHotelGroup (NYSE: IHG), Hilton (NYSE: HLT), Hyatt (NYSE: H) and Expedia-owned VRBO (NASDAQ: EXPE).

Biden also said he aims to roll out 100 million vaccines in his first 100 days in office, which would significantly accelerate the pace of current efforts to counteract the pandemic. On January 20th, Biden is seeking to sign about a dozen executive actions to address the pandemic, as well as a virus-stricken economy, climate change and racial equity.

Earnings

One of this week’s key earnings reports will come from Netflix (NASDAQ: NFLX) on Tuesday after market close. Last quarter’s results showed disappointing signs that the skyrocketing user growth that Netflix enjoyed during pandemic was slowing down. The streaming giant missed even its own conservative third-quarter new subscriber guidance for the summer, adding just 2.2 million new members as opposed the 2.5 million the company had expected. For the fourth quarter, Netflix expects 6 million net paid additions to its streaming platform, representing another YoY decline after adding 8.8 million in the fourth quarter of 2019.

Netflix, while still the leader among U.S. streaming platforms when it comes to total users, has also faced increasing competition over the past year, especially from relative newcomer Disney+ (NYSE: DIS). Disney’s streaming service had 86.8 million paying subscribers as of December 2nd, compared to the more than 195 million Netflix reported at the end of September. Disney also revealed it would be raising the monthly price of its streaming subscription starting in March, suggesting the entertainment giant believes it has the user demand and pricing power to command higher fees. Netflix needs to prove it can maintain its status as the king of streaming among this intense competition.

Wall Street expects earnings $1.38 per share on revenue of $6.61 billion, compared to the year-ago quarter when earnings were $1.30 per share on $5.47 billion in revenue.

Also, on Tuesday, Tuesday: Halliburton (NYSE: HAL), Charles Schwab (NYSE: SCHW), Bank of America (NYSE: BAC) and Goldman Sachs (NYSE: GS) will report their earnings before market open.

Wednesday

Morgan Stanley (NYSE: MS), US Bancorp (NYSE: USB), Citizens Financial Group (NYSE: CFG), Bank of New York Mellon Co. (NYSE: BK), Procter & Gamble (NYSE: PG), UnitedHealth Group (NYSE: UNH) will report before market open whereas Alcoa (NYSE: AA) and United Airlines (NASDAQ: UAL) will report after market close. Wall Street expects United Airlines to lose $6.58 per share on revenue of $3.46 billion. This compares to the year-ago quarter when earnings came to $2.67 per share on revenue of $10.89 billion. United had some $24 billion of capital expenditure commitments as of Q3 so amid the decline in travel demand, its aim is to reduce that spending as much as possible. Investors will be looking at such economic improvements to justify the argument that UAL is better positioned than other airlines to survive this downturn.

Thursday will feature IBM and Intel

Wall Street expects International Business Machines Corporation (NYSE: IBM) to earn $1.79 per share on revenue of $20.63 billion but what investors are really wondering is when will the real turnaround begin? Its cloud ambitions have promised to return value to shareholders, but shares still haven’t regained even their pre-COVID levels while the rest of the market has seen record highs. Cloud leaders such as Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG)(NASDAQ: GOOGL) are seemingly too far ahead for IBM to catch up. The new CEO Arvind Krishna is tasked with elevating Big Blue into a leading cloud and AI position, while distancing the company from the legacy business. Investors want to hear progress on these fronts.

Truist Financial (NYSE: TFC), Baker Hughes (NYSE: BKR), Union Pacific (NYSE: UNP) will also report on the same day before market open and Intel (NASDAQ: INTC) will make its appearance after market close.  Wall Street expects Intel to earn $1.10 per share on revenue of $17.48 billion, whereas the same quarter last year saw earnings of $1.52 per share on revenue of $20.21 billion. Intel shares have soared more than 10% Wednesday after the company confirmed that CEO Bob Swan will step down on February 15 and be replaced by Pat Gelsinger, the current CEO of VMWare (NYSE: VMW). On several important chip development fronts, Intel has lost ground to rivals AMD (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA). On Thursday, it must show the right things to support the confidence that Gelsinger can turn things around and quickly.

The week will be closed on Friday with earnings from Kansas City Southern (NYSE: KSU), Schlumberger (NYSE: SLB) and Ally Invest (NYSE: ALLY) who will all report before the stock market opens.

The inauguration may signal a dramatic shift and increase in government spending, but it remains to be seen whether hopes of a transformation can survive the reality of a narrowly divided Congress.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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