Ford Shares Trade Lower Following 15% Price Target Cut from Morgan Stanley

Shares of Ford F are reacting to a price target cut from $20 to $17 by Morgan Stanley, trading down 1.6 percent to $15.83. The firm maintained an Overweight rating on the stock. Analyst Adam Jonas reduced the 2015 earnings per share forecast by 12 percent from $2.08 to $1.83 for three reasons:

• Unanticipated headwinds in the key emerging market regions in Latin America.
• Increased competition in the U.S. market. The analyst expects “vastly improved cars on U.S. shores from 2015.
• Lightweighting of F-Series pickup applies up-front pressure to North America margins.

Jonas believes Ford will outperform broader auto coverage, “which on average has 7% downside to [the analyst's] price targets.” The shares may also be trading in sympathy to General Motors, which was hit with another negative headline and a downgrade from Jonas.