The automotive sector is expected to recover in the coming months in equal measures due to government and private investments to address a semiconductor shortage issue and rising consumer demand. Given this backdrop, Wall Street expects cheap auto stocks Penske (PAG), Asbury (NYSE:ABG), and Group 1 (GPI) to gain significantly in the near-term. So, let’s take a closer look at these names. The automotive industry has been recovering from its pandemic-driven lows, as evidenced by its solid sales growth in the first quarter. While the industry is currently grappling with a global semiconductor shortage, President Biden’s proposed $50 billion investment in semiconductor manufacturing and research and development, under the CHIPS for America Act, should boost the production levels significantly. There have also been private investments to address the semiconductor shortage issue.
Global automotive sales are expected to rise 8%-10% year-over-year to 83-85 million units in 2021.
Given this backdrop, Wall Street analysts expect cheap automotive stocks Penske Automotive Group, Inc. (NYSE:PAG), Asbury Automotive Group Inc . (ABG), and Group 1 Automotive, Inc. (NYSE:GPI) to rally in the coming months.