BWA - Auto suppliers sized up ahead of earnings with chip shortage in the mix

Baird checks in on the auto technology and mobility sector ahead of the Q1 earnings season. Analyst Luke Junk says transitory headwinds will be a major factor during earnings period, spanning well-known issues around chip supplies, ongoing global supply chain tightness and new Texas-related disruptions. "Hence, we are revisiting 2021 guidance assumptions to help better understand near-term risk/reward, but are also keeping an eye out for potential company-specific catalysts. Net, we are inclined to view potential earnings-related weakness as opportunity, as we position for normalizing chip dynamics, cyclical tailwinds, and accelerating secular tailwinds in 2H21 and beyond," he previews. Cummins ([[CMI]] -1.1%), Littelfuse ([[LFUS]] -0.8%) and Snap-on ([[SNA]] -1.5%) are singled out as companies that could surprise on the upside, despite the chip shortage overhang. Other auto tech/mobility stocks that Baird rides into the earnings rush with Outperform ratings on include Aptiv ([[APTV]] -2.0%), Visteon ([[VC]] -2.9%), Gentex ([[GNTX]] -1.4%),

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Auto suppliers sized up ahead of earnings with chip shortage in the mix