Ford Motor Co. F shares are moving to the downside Monday after a Jefferies analyst downgraded the stock.
The Auto Analyst: Philippe Houchois downgraded Ford from Buy to Hold and reduced the price target from $17 to $15.
The analyst maintained General Motors Corp. GM at Hold with a $39 price target.
Houchois maintained a Buy rating for Stellantis N.V. STLA and hiked the price target for the automaker's U.S.-listed shares from $22.90 to $25.30.
Slow-Motion Soft Landing Likely, Jefferies Says: The Detroit three reported better results and guidance, Houchois said in a Monday note. The analyst said he continues to see a slow-motion soft landing scenario in which price normalization will lift volume and cost inflation eases.
Ford's worsening electric vehicle unit losses and strategic wobble pushed Jefferies to the sidelines, the analyst said.
Stellantis, according to the analyst, still offers the best trade-off between valuations and returns by far and is still the best of the Detroit three.
Ford’s Near-Term Less Inspiring: "With a heavy heart, we cut F to Hold after a recent upgrade late May," said Houchois. The change in the guidance for the Model e – Ford's EV business, is a setback just a few weeks after the May 22 Investor Day, the analyst said.
Dearborn hinted at no change in the mid-term strategy, with the second-generation vehicles focused on the software-centric and concentrated line-up, the analyst said, adding that it makes sense to him.
This mid-term strategy is effective in 2026, leaving a less differentiated investment case in the interim years, he said.
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Auto Analyst Cautious On GM: Following the solid underlying EBIT beat, GM's management raised concerns about ramping up of EVs and a drift in warranties, which is repair cost inflation exceeding provisions, Houchois said.
The company, however, maintained its guidance for second-half volume of 100,000 units and the launch of three Ultium-based models by the year’s end, the analyst said.
Updating and continuing the Bolt model makes sense, given its price point, the analyst said. He also said the company did not provide any incremental update on Cruise on the earnings call at a time when sentiment on autonomous vehicles is being revived.
Stellantis Attractively Valued? On Stellantis, Houchois said there was nothing to dislike in the company's first-half results except for the relatively scant news on cash flow and balance sheet details.
Stellantis continues to build a strong third leg from LatAm to the Middle East and Africa, away from China risk, the analyst said.
“STLA shares performed well post results but its low valuation multiples remain quite attractive on 3.8x ’24E vs F and GM on 5.3x and 6.6x,” he added.
Auto Price Action: At last check, Ford shares slipped 1.62% to $13.05, according to Benzinga Pro data.
GM fell 0.34% to $37.92 but Stellantis gained 0.42% to $20.64.
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