Market Overview

Goldman Initiates Coverage On Auto Stocks, Says Industry 'Significantly Better Positioned' Than In 2008

Goldman Initiates Coverage On Auto Stocks, Says Industry 'Significantly Better Positioned' Than In 2008

Goldman Sachs took a deep dive into the U.S. auto industry, initiating coverage on 10 auto manufacturers and suppliers Tuesday.

The Auto Analyst

Mark Delaney issued the following auto stock ratings:

  • Tesla Inc (NASDAQ: TSLA) initiated at Buy with an $864 price target.
  • Aptiv PLC (NYSE: APTV) initiated at Buy with a $70 price target.
  • Gentex Corporation (NASDAQ: GNTX) initiated at Sell with a $19 price target.
  • Visteon Corp (NASDAQ: VC) initiated at Sell with a $41 price target.
  • Ford Motor Company (NYSE: F) initiated at Neutral.
  • General Motors Company (NYSE: GM) initiated at Neutral.
  • Magna International Inc. (NYSE: MGA) initiated at Neutral.
  • Lear Corporation (NYSE: LEA) initiated at Neutral.
  • Delphi Technologies PLC (NYSE: DLPH) initiated at Neutral.
  • BorgWarner Inc. (NYSE: BWA) initiated at Neutral.

See Also: Tesla's Stock Keeps Rising After Goldman Sachs Gives Shares $864 Price Target

The Auto Thesis

In the initiation note, Delaney said 2020 will be very challenging for the auto industry given COVID-19 supply and demand disruptions. (See his track record here.)

Goldman is predicting global auto sales will decline 17% in 2020 and U.S. light vehicle sales will drop 30%. The firm is anticipating those U.S. light vehicle sales will bounce back with 25% growth in 2021.

Unfortunately, even with Goldman’s auto coverage group down an average of 30% since late January, Delaney said there could be more downside in the near-term given the uncertainty of the pandemic. 

But Delaney said there is good news for auto investors as well.

“Importantly, based on our deep dive work on past cycles, balance sheets, and cash flows, we believe that the companies in our autos coverage are significantly better positioned to weather this current downturn than the one in 2008/2009 (even though we would not currently be buying stocks in the group broadly given the uncertainty about how long the current sharp economic slowdown will last),” the analyst said.

Goldman is most bullish on the EV market and recommends EV leader Tesla and its suppliers as top picks, including Aptiv.

Benzinga’s Take

Like most other industries, the auto industry is a mess at the moment. It’s unlikely many customers will be buying cars anytime soon, so the key questions for investors is how long will the downturn last and which companies are best-positioned to weather the slump.

Do you agree with this take? Email with your thoughts.

Photo courtesy of Tesla. 

Latest Ratings for F

Oct 2020BarclaysMaintainsEqual-Weight
Oct 2020Goldman SachsMaintainsNeutral
Oct 2020Deutsche BankMaintainsHold

View More Analyst Ratings for F
View the Latest Analyst Ratings


Related Articles (F + GM)

View Comments and Join the Discussion!

Posted-In: auto automotive Goldman Sachs Mark DelaneyAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

Latest Ratings

INTCJP MorganMaintains70.0
STMCanaccord GenuityMaintains47.0
ELDeutsche BankMaintains248.0
UAADeutsche BankMaintains13.0
INTCDeutsche BankMaintains55.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at