The Zacks Analyst Blog Highlights Tesla, General Motors and CarMax

For Immediate ReleaseChicago, IL – December 27, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Tesla TSLA, General Motors GM and CarMax KMX.Here are highlights from Thursday’s Analyst Blog:Top 3 Large-Cap US Auto Stocks to Steer Your Portfolio in 2025The U.S. auto industry faced headwinds in 2024, with affordability emerging as a central issue amid high interest rates and elevated vehicle prices. These challenges dampened demand, leading to a 2% year-over-year decline in third-quarter new vehicle sales — the second consecutive quarterly drop. Production forecasts for North American light vehicles were adjusted downward to 15.5 million units from an earlier estimate of 15.8 million as automakers opted for strategic production cuts to manage inventory levels.Affordability concerns are unlikely to dissipate quickly in 2025, as inflation remains sticky and interest rates, while expected to decline, are projected to fall at a slower pace. Fed Chairman Jerome Powell has signaled a more cautious approach, hinting at fewer rate cuts next year than previously anticipated. Policy changes under the Donald Trump administration could add further complexity, with proposed tariffs on imports potentially driving vehicle prices higher.S&P Global Mobility projects U.S. auto sales volumes to reach 16.2 million units in 2025, reflecting a modest 1.2% increase from the estimated 2024 level. As the auto industry navigates an uncertain landscape in 2025, large-cap stocks like Tesla, General Motors and CarMax could be great considerations, all boasting improved earnings outlooks. These stocks offer a balanced blend of stability and growth potential.Why Large-Cap Auto Stocks Stand OutIn times of market volatility, large-cap stocks offer a stable and reliable investment option. Their established market presence, robust financials, and consistent performance make them attractive, particularly for risk-averse investors. Additionally, large-cap companies often prioritize shareholder returns through dividends and share buybacks, further enhancing their appeal.While large caps may lack the high-growth allure of smaller, more volatile companies, their steadiness provides a cushion against market turbulence. This makes them an essential component of a well-diversified portfolio, especially given the unpredictable dynamics expected in 2025.3 Stocks to Buy NowTesla: This electric vehicle (EV) giant has been on a tear since Trump's victory in the 2024 elections. Despite potential rebate cuts under a Trump presidency, Tesla is well-positioned to thrive without subsidies, thanks to its cost efficiency and unmatched scale. CEO Elon Musk’s forecast of 20%-30% growth in vehicle deliveries for 2025 underscores Tesla’s robust demand trajectory. Additionally, its thriving Energy Generation & Storage segment, expansive Supercharger network and AI advancements augur well.Tesla’s robust balance sheet, with a high liquidity buffer, supports continued innovation and expansion. Progress in the autonomous vehicle domain, including plans to launch robotaxi services in 2025, positions the company well. Tesla is no longer just an automaker but a transformative force in the clean energy and technology sectors.The Zacks Consensus Estimate for Tesla’s 2025 revenue and earnings imply year-over-year growth of 17.5% and 32%, respectively. Over the past 30 days, the EPS estimates for 2025 have moved up 6 cents to $3.26. TSLA (with a market cap of roughly $1.5 trillion) currently carries a Zacks Rank #2 (Buy).General Motors: It is the top-selling automaker in the United States, with a compelling portfolio and a strong demand for its quality pickups and SUVs. The company’s cost-cut efforts are praiseworthy. It is on track to achieve its $2 billion net cost reduction program by the year-end. Its superior liquidity profile and robust buyback program are positive indicators. GM had total automotive liquidity of $40.2 billion as of Sept. 30, 2024. The company has bought back shares worth around $12.5 billion since last November and is expected to continue its buyback spree in the foreseeable future.GM is advancing well in its electrification journey. It aims to improve sales and profitability in its EV business by reducing battery costs, introducing new models and expanding its scale. The company is on track to make its EVs profitable on an EBIT basis by the end of this year.The Zacks Consensus Estimate for General Motors’ 2025 earnings suggests year-over-year growth of 2.7%. Over the past 30 days, EPS estimates for 2025 have moved up 13 cents to $10.62. It has surpassed earnings estimates in each of the trailing four quarters. GM (with a market cap of roughly $59 billion) currently carries a Zacks Rank #2.CarMax: It is the leading used car retailer in the United States. The company’s extensive nationwide footprint and logistics network provide CarMax with a competitive advantage. In fiscal 2025 (ending February 2025), KMX plans to open five new stores, including smaller cross-functional ones, launch a second reconditioning facility in Mississippi, and debut an offsite auction in Los Angeles. Fiscal 2026 will see additional offsite reconditioning and auction locations, further enhancing its operations.Strategic buyouts like the Edmunds acquisition have bolstered its digital capabilities and market expertise. Collaboration with Recurrent provides insights into used EV batteries, cementing KMX’s leadership in used EV sales. Omnichannel initiatives, including MaxOffer and an online appraisal tool, are driving growth in purchases and wholesale sales, supported by data science and AI enhancements. KMX’s investor-friendly moves inspire confidence.The Zacks Consensus Estimate for CarMax’s fiscal 2025 and 2026 earnings suggests year-over-year growth of 4.3% and 22.2%, respectively. Over the past seven days, the EPS estimates for current and next fiscal have moved up by 14 cents and 11 cents, respectively. KMX (with a market cap of roughly $13 billion) currently carries a Zacks Rank #2.You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.com                                      https://www.zacks.com                                                   Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Motors Company (GM): Free Stock Analysis Report CarMax, Inc. (KMX): Free Stock Analysis Report Tesla, Inc. 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