Tenneco Offers Modules For Jaguar's First All-Electric SUV

Tenneco Inc. (NYSE:TEN) is providing suspension components for the new Jaguar I-PACE all-electric luxury crossover SUV. Tenneco’s passive front and rear dampers along with coil and air spring suspension modules will enhance the new Jaguar model’s performance and stability.

For efficient functioning of electric powertrains, e-vehicles should have a reduced amount of overall weight compared with combustion engine vehicles. Tenneco’s suspension module consists of plastic spring seats, aluminum top mount and light-weight components that will cut the weight of electric motors and battery, thus, improving performance.

Tenneco is supplying suspension components and modules from production hubs situated at Sint-Truiden, Belgium, Hodkovice, the Czech Republic and Birmingham, U.K. Each facility manufactures a specific component for customers. The plant at Belgium is providing front passive dampers while the Czech Republic manufactures rear passive dampers and rear modules, and front air & coil module assembly at the U.K. facility.

Tenneco Inc. Price and Consensus

Tenneco Inc. Price and Consensus | Tenneco Inc. Quote

This is not the first time when Tenneco is supplying auto components for Jaguar’s vehicles. In October 2018, the company provided suspension technology for Jaguar E-PACE compact SUVs. Apart from Jaguar, Tenneco is also a regular component supplier for Ford Motor Company (NYSE:F), BMW AG, AB Volvo and Daimler AG (DE:DAIGn).

Varied product range offered to numerous end-markets and geographical regions are the major revenue drivers for Tenneco. Additionally, the acquisition of Federal-Mogul at the beginning of the fourth quarter and Ohlins Racing in January 2019 will support Tenneco to create two separate entities and benefit from synergies.

In its preliminary results for 2018, the company reported total revenues of $11.8 billion, which includes the Federal-Mogul synergy. For the current year, Tenneco expects revenues to improve year over year, backed by growth drivers. On a pro-forma basis, it anticipates constant-dollar revenues to grow 4-5% in 2019, exceeding the light-vehicle industry production by 6-7 percentage points.

Over the past six months, shares of Tenneco have underperformed the industry it belongs to. During the period, shares of the company have lost 22.7% compared with the industry’s decrease of 12.3%.

Zacks Rank & Stocks to Consider

Tenneco currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader auto sector are General Motors Company (NYSE:GM) , CarGurus, Inc. (NASDAQ:CARG) and Fox Factory Holding Corporation (NASDAQ:FOXF) , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

General Motors has an expected long-term growth rate of 8.5%. Shares of the company have gained 12.3% in the past three months.

CarGurus has an expected long-term growth rate of 5%. Share price of the company has increased 13.5% in the past three months.

Fox Factory has an expected long-term growth rate of 15.1%. Over the past month, shares of the company have gained 4.8%.

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