UBS' Automotive Sector Preview

UBS analyst Colin Langan gave an earnings preview for the U.S. auto sector Monday.

Langan forecasted that Tesla Motors Inc TSLA will report Q4 EPS of $0.34, above consensus of $0.31. The Q4 outlook was based on 33,000 FY14 deliveries. UBS also forecasted 62,000 deliveries in 2015 and 13,000 in the first quarter of 2015 with a gross margin of 25 percent.

“We'd expect the stock to react favorably if guidance for sales and margin are consistent with our estimates, particularly with the stock down >10 percent since mid-November,” according to Langan.

Tesla reports earnings on February 11 and recently traded at $215.78, down 0.73 percent.

For BorgWarner Inc. BWA the firm’s outlook was consistent with the company’s guidance of $3.23 to $3.28 in EPS for the fiscal year and expected the company will maintain is FT 2015 guidance even though it has some exposure to the Euro.

BorgWarner reports earnings February 12 and recently traded at $57.31, down 2.13 percent.

Langan felt that shares of TRW Automotive Holdings Corp. TRW will be driven by management’s comments regarding the ZF transaction and details regarding the 2.12 million vehicles recalled as a result its faulty airbag ECU.

TRW Automotive reports earnings February 13 and recently traded at $103.16, up 0.01 percent.

Langan also reiterated a Buy rating on Fiat Chrysler Automobiles NV FCAU and believed a “standalone Ferrari & a de-stressed balance sheet are already priced-in,” but Langan expected “further improvement from up-coming organic de-leveraging of stub-FCA.”

Fiat Chrysler recently traded at $13.35, down 1.84 percent.