Breaking News
Investing Pro 0

UBS Cuts Numbers on GM and Ford; BofA Notes Improvements for Tesla and VW

Stock Markets Jul 06, 2022 14:42
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
GM
+1.56%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
F
+2.27%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
STLA
-2.95%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MBGn
-1.70%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BMWG
-1.33%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
TSLA
+1.72%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Senad Karaahmetovic

UBS analyst Patrick Hummel has reflected on the European and US Autos sector ahead of the Q2 earnings session.

The analyst believes the Q2 earnings should be similarly strong to Q1 for original equipment manufacturers (OEMs). Still, he moved to cut EPS for 2023E and 24E for all legacy OEMs by up to 30% “to reflect the much weaker macro picture that we expect to result in shrinking pricing power, a softer product mix, and lower finco results”.

He believes investors will be fully focused on the commentary centered around “potential first cracks”.

“For European OEMs, higher energy cost & risk of gas rationing imply additional downside to 2023 earnings. Across the legacy OEMs, we model c200-300bps EBIT margin contraction y/y in 2023E, and our estimates are now 15% below consensus. While stocks look cheap even after our EPS cuts at c5x PE 2023E vs. long-term 7-8x PE (the market prices a steeper drop in EPS), we think most investors are likely to remain on the sidelines waiting for consensus revisions to come through,” Hummel told clients in a note.

The analyst expects Tesla (NASDAQ:TSLA), Volkswagen (ETR:VOWG_p), and Stellantis (BIT:STLA) to “stand out positively”.

“Tesla with a very solid 26% auto GM ex-credits in a challenging quarter (Shanghai shutdown and Berlin and Austin ramp-up); VW with 7.9% OP margin (UBSe), despite €1.5bn expected commodity hedging losses; Stellantis with 13.2% OP margin in H1. On the other hand, Mercedes (ETR:MBGn) & BMW (ETR:BMWG) will likely have a sequential decline in EBIT margins q/q. Also, we expect first headwinds in finco results to materialize - this also applies to GM and Ford.”

As a result, Hummel cut price targets on several OEMs, including General Motors (NYSE:GM) to $56 from $77, Ford Motor (NYSE:F) to $13 from $20.50.

Elsewhere, BofA analyst Horst Schneider noted that the global BEV sales were up by 64% y-o-y and up c30% m-o-m in May 22, fueled by strong demand in China.

The analyst added that Tesla’s global market shares moved to 11% in May from 10% in April, while VW bounced back in Europe.

Volkswagen sold more units than Stellantis after a weak April performance.

“This was despite STLA again having strong sales of the Fiat 500 EV (6k unit sales) and the Peugeot e-208 (4.7k units). [For VW], global EV sales however still remain down c8% y-o-y. We think May should have been the trough. ID.3 sales look to be improving and the VW ID.4 continues to hold up. China BEV sales at 43k units y-t-d vs FY22 target of >160k units,” Schneider wrote in a note to clients.

 
 
UBS Cuts Numbers on GM and Ford; BofA Notes Improvements for Tesla and VW
 

Related Articles

Volkswagen battery IPO could be next, says CFO
Volkswagen battery IPO could be next, says CFO By Reuters - Sep 29, 2022

FRANKFURT (Reuters) - Volkswagen (ETR:VOWG_p) is considering forming partnerships in the next 1-2 years as a first step towards a possible listing of its PowerCo batteries...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email