The Zacks Analyst Blog Highlights: Tesla Motors, Wells Fargo, JPMorgan Chase, Bank of America and Citigroup
CHICAGO, May 28, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Tesla Motors, Inc. (Nasdaq:TSLA-Free Report), Wells Fargo & Company (NYSE:WFC-Free Report), JPMorgan Chase & Co. (NYSE:JPM-Free Report), Bank of America Corp. (NYSE:BAC-Free Report) and Citigroup Inc. (NYSE:C-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday's Analyst Blog:
Panasonic Wants Tesla Gigafactory to Itself
Tesla Motors, Inc.'s (Nasdaq:TSLA-Free Report) Gigafactory might have Panasonic Corporation as a partner and sole manufacturer of lithium-ion battery cells, according to the latter. However, other partners might supply raw materials to the factory.
Tesla will invest $2 billion in the factory, while the construction will require $4–$5 billion. The rest of the fund will be provided by Tesla's partners. Tesla is considering other potential investors, such as suppliers of raw materials for the investment. Panasonic does not have a time constraint to decide the amount and timing of the investment. However, it said that it will make investments gradually and that those till March will be small.
Panasonic and Tesla signed a deal in Oct 2013, under which Panasonic will increase the supply of battery cells to 2 billion in the 4-year timeframe till 2017. Panasonic has supplied 200 million cells to Tesla in the last 2 years.
In addition, Panasonic doubled its investment for auto batteries to 28 billion yen ($275 million) this year. Panasonic will utilize this additional investment to boost the domestic production of the small lithium-ion batteries for Tesla.
In February, Tesla announced the plans to construct the Gigafactory to produce lithium-ion batteries for its cars in collaboration with various partners. The automaker expects the factory to provide economies of scale and reduce production costs based on innovative manufacturing techniques, reduced logistic wastes, optimization of co-located processes and lower overhead costs.
Tesla will be initiating the construction work this year and expects to finish the factory by 2017. The factory will supply lithium-ion batteries to Tesla's assembly plant in Fremont, CA.
By 2020, Tesla expects the annual lithium-ion battery production of the Gigafactory to exceed the global production in 2013. The factory will produce enough battery packs to allow Tesla to build around 500,000 electric cars by 2020. Also, by the end of the first year of manufacture of the planned mass market vehicle, the per kWh cost of production of battery packs is expected to be reduced by over 30%.
Tesla currently carries a Zacks Rank #5 (Strong Sell).
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Wells Fargo & Company (NYSE:WFC-Free Report) is set to end the legal tussle it has been encountering since 2011 for a settlement of around a minimum of $67 million in connection with the 'robo-signing' fiasco. It was alleged that the company officials have conducted improper verification of documents in the home-foreclosure process.
The Background
In a judicial foreclosure state, the foreclosure process requires that the lending institution must authorize the fact that the homeowner has defaulted on a mortgage which the lender owns. It needs to be authorized through submission of verified documents and written statement duly signed under affidavit by a bank official. The objective is to restrict the possession of houses by the bank in the event where the bank is unable to prove the ownership of the particular mortgage or where in actuality the homeowner has not defaulted to the extent stated in the foreclosure papers.
In the wake of the mortgage crisis, in 2010, the robo-signing scandal popped up, according to which a number of banking giants including Wells Fargo, JPMorgan Chase & Co. (NYSE:JPM-Free Report), Bank of America Corp. (NYSE:BAC-Free Report) and Citigroup Inc. (NYSE:C-Free Report) regularly used false affidavits signed by bank officials without proper review and verification of documents. The term 'robosigner' was coined as the fact that bank official of companies speedily approved numerous foreclosure documents without true knowledge. This amounted to breach of law and faulty documents that caused improper foreclosure of homes.
Notably, in 2012, Wells Fargo along with other financial institutions reached a settlement for $25 billion owing to charges of faulty documents and other doubtful foreclosure practices.
The Settlement
Though Wells Fargo has not accepted the allegations, it has agreed for the settlement to lessen litigations, uncertainty and risks.
As per the latest settlement, Wells Fargo will shell out $36.5 million as down payment assistance to affected home buyers in places including California's Central Valley, Detroit, St. Louis and Virginia Beach, VA. Further, the bank will provide $6 million in counseling support for its customers who are in a difficult position to make mortgage payments.
Also, Wells Fargo will integrate operations of residential mortgage servicing in order to ensure consistent management of the business. The company expects to incur $24.5 million as consolidation cost.
Wells Fargo currently carries a Zacks Rank #3 (Hold).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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