The auto industry is in the process of one of the largest overhauls in its history. Several primary trends are shaping future mobility, including connected vehicles, autonomous vehicles, electric vehicles and ride-sharing services. Bank of America Corp. estimates that electric vehicle sales will grow from 1 percent of global car sales in 2017 to 90 percent by 2050. There are plenty of companies with exposure to future mobility, but not all of their stocks make good long-term investments. Here are eight future mobility winners and losers chosen by Bank of America’s analyst team.
Winner: Yandex NV (ticker: YNDX)
Yandex is one of only a handful of companies that is effectively competing with Google (GOOG, GOOGL). Yandex holds roughly a 65 percent market share of online advertising and paid search in Russia. In August, Yandex began testing autonomous vehicles, and it has the data collection capabilities and resources to be an early leader in Russian driverless transportation. Analyst Cesar Tiron says the market is too pessimistic about the potential negative impact of regulations and says 2019 consensus earnings estimates of 14.5 percent are too low. Bank of America has a “buy” rating and $43 price target for YNDX stock.
Winner: Sociedad Química y Minera de Chile (SQM)
SQM is a Chilean chemical company and is the world’s largest supplier of iodine, lithium and specialty plant nutrients. SQM produces about 30 percent of the world’s lithium, a major component in today’s electric vehicle batteries. Not only is SQM one of the lowest-cost lithium producers, analyst Isabella Simonato says SQM produces a high-grade product and has the capacity to scale its production significantly if needed. Oversupply has hurt lithium prices in 2018, but Simonato says this downside is limited due to surging global demand. Bank of America has a “buy” rating and $57 price target for SQM stock.
Winner: Sensata Technologies Holding (ST)
Sensata Technologies manufactures sensing technology, such as pressure sensors, position sensors and force sensors. The data collected and used to keep automobile passengers safe is only as good as the sensors that are collecting it, and the trend toward connectivity in the auto industry is good news for Sensata. The company has been gaining market share in both the U.S. and China, and analyst Wamsi Mohan says Sensata has the potential to expand outside its current verticals in the long term. Bank of America has…
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