Are automobile companies going to be hot in 2021?

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After the craziness of 2020, everyone hopes that 2021 will be a better year than last year. 

The beginning of 2021 is off to a good start as COVID-19 vaccinesby Moderna and Pfizer/BioNTech has been approved by the FDA and is able to be distributed in the United States. The vaccine has investors excited as now there is hope that COVID-19's effect will be mitigated and the US economy can start to get back to normalcy.

Even though we are able to combat COVID-19, a majority of commuters who used to use public transportation to go to work are now switching to cars as the mode of transportation because they feel safer using their own vehicle. The effects can already be seen as used Ford car prices are already up 16% since 2018(Cargurus).

Automobile companies are one of the biggest winners from this positive outlook as production lines can soon start to open up more and increase their production to meet the high demands for new and used cars.

General Motors Company(GM) is one of my favorites for this year because it is currently listed at $43 and already up 7% since the beginning of the year. Analysts predict that the stock will forecast between $56 to $72 within the next 12 months, and 15 analysts recommend a buy while only 2 recommend a hold(CNN Money). 

GM's transition to producing more electric vehicles will allow them to capitalize on the long run as people are switching to renewable energy sources. They unveiled their new logo, with an app like border and bright colors, highlights their commitment to electric vehicles.

Ford(F) is listed at around $9 and is already up over 5% since the beginning of this year. Analysts predict that within the next 12 months the stock will be between $9.50 to $14.00.

Ford started to sell a redesigned F-150, one of the most popular vehicles in America, during their 4th quarter which caused a shortage of pickup trucks because of the high demand. However, the shortage caused a decline in their sales for the 4th quarter. 

The high demand for the F-150s shows the potential to beat Q1 earnings as production lines can open up and supply the high demand for the F-150s while spending less money to import chips for the trucks.

The Ford Mustang Mach-E, Ford's first all-electric crossover, was also released at a reasonable price of $42,895 or $35,395 after Federal Tax Credit. It has a range of 230 miles which is comparable to the range of the Tesla Model Y Standard Range while going for a much cheaper price, A more affordable electric vehicle option will really allow Ford to compete with Tesla and steal a portion of Tesla's market share unless Tesla can retaliate. 

The Mustang's better efficiency at a lower price shows Ford's bright future in the electric vehicle industry and get ahead of other traditional automobile companies. 



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