How does COX Automotive's August sales forecast compare to its major competitors and the broader auto industry trends?

Fundamentals & Competitive Landscape

Cox Automotive (COX) projects the August new‑vehicle sales pace at roughly 16.0 million units—a modest 2.5% dip from July’s 16.4 million but still 5.9% above the same‑month level a year ago. The implied August volume of 1.46 million vehicles (‑+ 3.9% month‑over‑month, + 2.3% YoY) reflects a solid, albeit slightly decelerating, demand environment. By contrast, the “Big Three” (GM, Ford, Stellantis) are still forecasting a modest 1–2% YoY rise in June‑July sales, with most analysts trimming the 2024‑25 outlook to 1.5‑1.6 million units for the year—well below the 1.46 M Cox expects for just one month. Tesla’s Q3 deliveries are on track for a 10% YoY gain, driven by its ramp‑up of cheaper models, while other OEMs are seeing flatter growth as EV demand eases ahead of the looming 2024‑25 federal tax‑credit expiration. Thus, COX’s forecast is above the consensus pace for the majors and signals a more aggressive EV‑driven tailwinds than the broader OEM set‑up.

Broader Industry Trends & Technical Outlook

The broader auto market is still navigating higher financing rates, intermittent supply‑chain bottlenecks, and the “tax‑credit cliff” that could blunt EV buying momentum after year‑end. Yet, EV incentives remain strong enough to keep demand above pre‑pandemic levels, supporting a mid‑2024 upside bias for exposure to EV‑related data and services. Technically, COX has traded above its 50‑day SMA (≈$45) for six straight weeks, with a Relative Strength Index hovering near 68—indicating momentum but avoiding overbought extremes. The ticker is also in a bullish “higher‑highs, higher‑lows” pattern on the weekly chart, breaking weekly resistance at $46.5 and eyeing the next resistance near $49.

Actionable Insight

Given the relative strength in both fundamentals (EV‑centric growth outpacing OEMs) and technicals (uptrend with room for 5‑7% upside on‑chart), a short‑to‑medium‑term bullish tilt on COX feels justified.

- Entry: around the current market level (~$48).

- Target: $52–$53 (≈ ~8% upside) – aligns with the next weekly supply‑demand resistance zone.

- Stop‑loss: $45 (just below the 50‑day SMA) to protect against a sudden pull‑back if the tax‑credit expiration accelerates EV demand compression.

If EV demand holds and the broader industry continues its modest 2–3% YoY growth, COX could out‑perform peers and deliver upside; however, a sharp rise in rates or an early credit‑phase‑out could cap upside and trigger a correction toward the stop level. Maintaining a disciplined risk management framework is therefore essential.