Ford, GM and other automakers face 50% profit slump next year, UBS analysts say
A three-year run of “unprecedented” pricing and margins is about to end abruptly, with a glut of cars beginning to emerge as soon as three months from now, the analysts added. , whose third-quarter deliveries failed to match up to expectations, both UBS and RBC analysts struck a more benign note. UBS sees the Elon Musk-led company continuing its “aggressive” growth through cutting prices and leveraging costs, while RBC’s Spak said it is very well-positioned mid-term as the low-cost EV provider.
Still, demand trends will be a key item to watch for Tesla as well, Spak added. Tesla shares were down 1.5% at $219.79. Multiple threats confront the industry, with strained consumers seeking to downgrade and growing inventories that will leave automakers unable to pass on inflationary pressures, the UBS analysts said. In September, Ford warned of how rising costs were affecting its earnings, prompting its stock to plunge. European auto stocks have surrendered their post-pandemic gains.
The nearer term outlook is more positive, with the third quarter expected to be another strong one for most manufacturers, the analysts wrote. Some companies may show improved margins, with
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