Top Analyst: Auto Environment Improved Last Quarter

Automakers are benefiting from better-than-expected results in China and Europe as well as a steep drop in commodity costs, an analyst said Monday.

J.P. Morgan's Ryan Brinkman called the global environment for the industry "mixed," but said it looked a bit better than when companies in the group posted fourth-quarter results.

Related Link: JP Morgan: We're Slashing Tesla Estimates Because Of These 2 Factors

Outlook

With General Motors Company GM set to post first-quarter earnings on Thursday, Brinkman boosted his earnings forecast for GM slightly on strong sales of pickup trucks and sports-utility vehicles, as well as lower-than expected losses from operations in Europe.

Ford Motor Company F, which reports results April 28, will post higher-than-expected first-quarter taxes and product launch costs, according to Brinkman, who cut his first-quarter earnings prediction slightly but left his full-year forecast intact.

Tesla Motors Inc TSLA is likely to offer a disappointing outlook when it posts results May 5, according to Brinkman, who foresees higher costs and a delay in the ramp-up of Tesla's Model X auto until the fourth quarter.

Brinkman slashed his price target on Tesla nearly 6 percent to $165 a share, while maintaining an Underweight rating.

Tesla, down nearly 8 percent in the year to date, changed hands recently at $204, off $2.79.

Brinkman maintained Overweight ratings on both GM and Ford, with price targets of $46 and $19 respectively.

Brinkman boosted his first-quarter earnings estimate for GM by 4 percent to $0.99 a share, while cutting his Ford EPS estimate by 12 percent to $0.22.