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How Are Auto Stocks Faring against the S&P 500 in 3Q17?

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Aug. 18 2017, Published 12:00 p.m. ET

Auto industry’s 2Q17 earnings

The 2Q17 earnings season is nearly over. All of the key auto companies (IYK) have reported their earnings for the quarter. Mainstream auto companies including General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) reported positive YoY (year-over-year) earnings growth in the second quarter.

Despite the earnings beat, Ford, the second-largest US automaker, wasn’t able to regain investors’ confidence. Before we analyze automakers’ 2Q17 earnings reports in more detail, let’s take a quick look at auto stocks’ recent performance on Wall Street.

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Auto stocks in 3Q17

During the 2Q17 earnings season, auto stocks (IYK) remained highly volatile with a mixed bias. Investors’ concerns about weakening US auto sales could be the primary reason for the mixed sentiment on Wall Street.

As of August 17, 2017, Ford has fallen ~4.9% in 3Q17. During the same period, Fiat Chrysler and General Motors are trading in positive territory with ~17.9% and 0.2% gains during the quarter, respectively. Fiat Chrysler’s expanding profit margins and improving debt position could be two primary reasons for the optimism in its stock.

So far, Ferrari (RACE) stock has risen ~27.0% in 3Q17—compared to 1.8% gains in the S&P Index (SPY) in 3Q17.

Series overview

In this series, we’ll take a closer look at mainstream automakers’ 2Q17 earnings and other key financial figures. We’ll discuss automakers’ 2Q17 sales volumes, revenues, and margins. We’ll explore the key strengths that drove their earnings in the second quarter. At the end of this series, we’ll compare mainstream automakers’ valuation multiples.

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