The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0915 ET – Uber is executing a barbell strategy. On one hand, the ride-hailing company is working to pass along savings to more price-sensitive customers, CEO Dara Khosrowshahi, says in an interview with CNBC. An example of this, he notes, is Uber’s new ‘Wait and Save’ option, which offers lower priced rides in exchange for longer pickup times. At the same time, “the premium business is doing really well,” Khosrowshahi says. “Premium is now over $10 billion, up 30%.” He adds that the company will continue to target both demographics to maximize earnings. (connor.hart@wsj.com)
0909 ET – “We’re not seeing weakness in the consumer,” Uber CEO Dara Khosrowshahi says in an interview with CNBC. “It’s steady as she goes, and for Uber, that’s great news.” The ride-hailing company says that both trips and gross bookings grew 18% year-over-year in the recent quarter, with upticks across both mobility and delivery. Currently, Uber is working to lower its insurance costs, Khosrowshahi says. He adds that these savings are being passed along to consumers in the form of lower prices, which are spurring demand. “In the U.S. in July, we’ve seen trip growth accelerate versus 2Q as a result,” Khosrowshahi says. (connor.hart@wsj.com)
0844 ET – Uber achieved all-time highs in platform audience and frequency during the recent quarter, CEO Dara Khosrowshahi says in prepared remarks along with Uber’s 2Q results. “Our monthly audience expanded to a record 180 million consumers, up 15% year over year, and those consumers used the platform more frequently than ever, averaging 6.1 trips per month,” he says. These trends resulted in top-line growth, which coupled with continued cost discipline, resulted in better profitability, according to Khosrowshahi. “Reflecting our continued confidence in the business, today we announced a new share repurchase authorization of an additional $20 billion as part of our sustained focus on value creation for shareholders,” he adds. (connor.hart@wsj.com)
0633 ET – Rheinmetall is quite likely to upgrade its full-year guidance significantly, either on Thursday or in the second half of the year, mwb-research analyst Jens-Peter Rieck tells Dow Jones Newswires. Rieck forecasts a revenue compound annual growth rate of about 27% through 2030, with sales ranging between 40 billion and 69 billion euros by the end of the decade. This would position Rheinmetall as one of Germany’s top structural growth stories, he says. The real growth is expected in the third and fourth quarters once Germany finalizes its 2025 defense budget in September and procurement priorities in October, he adds. Shares are down 0.5% at 1,759.50 euros. (cristina.gallardo@wsj.com)
0602 ET – Tariff risks appear under control in the European auto industry, Jefferies equity analysts say in a note. The negative effects of tariffs are partly offset by relaxed CO2 rules, supporting demand for European autos in the U.S., they say. “European volumes are soft but stable in premium segments,” Jefferies says. (miriam.mukuru@wsj.com)
0534 ET – IAG is seen as the best of breed European long-haul network operation, but shares seem skewed to the downside on some near-term risks, UBS analyst Jarrod Castle says in a note. There is concerns the U.K.’s current and autumn budgets will affect travel, and premium travel in particular, he says. Furthermore there are worries over yield progression on North Atlantic routes, and that profit growth momentum might slow down, or reverse, Castle says. UBS downgrades its rating on the stock to sell, from neutral, and raises its target price to 350 pence from 285 pence. Shares are down 1.6% at 375.20 pence, and are up 24% in the year to date. (anthony.orunagoriainoff@dowjones.com)
0541 ET – BYD’s improved product mix led by high-end products, coupled with overseas growth, will likely offset pressure from softening domestic demand and help boost blended profit per car, HSBC Global Research analysts write in a note. The company’s earnings will remain resilient, thanks to overseas retail sales, which have higher margins and have more than doubled from a year earlier in the first half, they add. The improved product mix, driven by the introduction of premium features to mass-market models, could also support earnings, they say. BYD’s disciplined cost controls and accounting treatment have provided a solid profit buffer, they say. HSBC Global Research maintains its buy rating and target price of HK$151 for the stock. Shares last closed at HK$111.60. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0335 ET – Schaeffler’s second-quarter adjusted earnings miss expectations and disappoint, coming after more positive updates from peers, Jefferies analysts say in a research note. The German car-parts supplier confirmed its full-year guidance, which is helpful in light of currency headwinds, but its results are set against a backdrop of more upbeat updates in the auto-supplier sector over the past few weeks, Jefferies says. Schaeffler’s earnings before interest and taxes excluding special items missed consensus forecasts by 10% and this was mainly due to weaker-than-expected results from its bearings-and-industrial solutions division, Jefferies says. Shares fall 6.7%. (adria.calatayud@wsj.com)
2335 ET – Visibility into Horizon Robotics’ shipment and margin trends could improve in 2H, Citi analysts write in a note. The company, which produces advanced driver-assistance system chips and provides services to automakers, may see stable 2H shipments for flagship products. In 2H, Geely’s contribution to Horizon is expected to rise from a very low base in 1H, while BYD shipments is forecast at 300,000-350,000 units under the base case and more than 500,000 units in the bull case, Citi says. Horizon’s relationship with Bosch may also deepen. Citi projects Horizon’s 1H revenue at 1.4 billion yuan-1.5 billion yuan, supported by hardware shipments of roughly 2 million units. The company’s 1H 2024 revenue was 934.6 million yuan. The bank maintains a buy rating on the stock with a HK$12.30 target. Shares are last at HK$7.43. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
