Road & Spak "Non-auto feedback" Spak

研报英文原文证据摘录

Road & Spak "Non-auto feedback" Spak

Even reasonable multiples on future earnings

discounted to today make near-term multiples look elevated (relative to historical). This

makes the “what’s priced in” question more difficult. Other feedback from generalist

investors as they start looking at autos is 1) surprised by the solid cash flow of these

business and 2) interest in seeking cyclical torque and think auto screens well (we've

argued that autos fit de-escalation trade intersecting on being beneficiaries from both

lower oil and potential rate cuts). One final thing to consider: we get the sense that

companies are going to use earnings calls as the opportunity to update the market on

these future opportunities. That could detract the focus on those calls from the

performance of the business over the past 3 months (misses/beats) and/or over the

coming 6 months (2026 guidance). This makes the earnings reaction game much more

difficult, in our view, since announcements could outweigh results/guidance.

How are investors thinking about it? We think our tiered framework works

well.

Tier 1: Names where companies are solving for a customer pain point or shortage.

That is not to say there isn't work to be done and standards/qualifications that

need to be met (true for all tiers), but auto names already have to meet difficult

and robust standards and make product for harsh environments. The names in this

tier are BWA (where the case is arguably the strongest) and F. Power generation is

in short supply with turbine backlogs extending years out. BWA’s micro-turbine

(TurboCell) product will have 2GW of initial capacity, so availability is key, and

strong demand could lead to capacity expansions. The CEO has commented that a

capacity expansion decision could occur late 26/early 27.