GM, Ford Shares Near New 52-Week Lows: Why UBS Is Concerned About Legacy Automakers

Zinger Key Points
  • UBS Bank cut its 2023-24 EPS expectations for Ford and General Motors.
  • Following the news, both stocks are nearing 52-week lows.

As consumer spending and pricing power decrease, the automotive industry continues to struggle. In another blow to the sector, UBS Group AG UBS lowered its 2023-24 earnings per share expectations Wednesday for General Motors Company GM and Ford Motor Company F.

What Happened: UBS analysts said they are concerned the companies will fail to meet expectations, as consumers are becoming less likely to purchase a car.

Due to inflation and a struggling supply chain, it has become increasingly difficult and costly for one to buy a car, leaving consumers hesitant to purchase.

Many consumers believe that it makes more sense to hold off on a purchase in hopes that prices will decrease in the coming months. 

A recent spike in gasoline prices due to the Russia-Ukraine conflict is making consumers more likely to buy a electric vehicle from companies such as Tesla Inc TSLA, at the expense of traditional internal combustion vehicles.

With all of these factors in mind, UBS analysts adjusted their 2023-24 outlooks for Ford and General Motors. 

The bank reduced its EPS predictions for GM from $77 to $56. In addition, UBS cut its Ford EPS prediction from $20.50 to $13, according to Investing.com.

How This News Impacts Investors: As expected, this news drove Ford and GM’s stock down Wednesday. 

Ford shares are down 2% to $10.98 in afternoon trading as it nears its previous 52-week low of $10.61, according to Benzinga Pro.

GM stock is down 3.57% at $31.22, nearing its previous 52-week low of $30.33, according to Benzinga Pro.

Also Read: Why General Motors Stock Is Sliding

GM CEO Mary Barra. Benzinga file photo by Dustin Blitchok. 

Posted In: autoautomotiveUBSAnalyst ColorLarge CapNewsGuidanceShort IdeasAnalyst RatingsMoversMediaTrading Ideas

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