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US Automakers in China: Analysts’ Views after the August Sales Releases

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Recommendations on Ford and GM

According to the data by Thomson Reuters, 24% of the 25 analysts covering Ford Motor (F) have given the stock a “buy” recommendation. By comparison, about 36% of the 25 analysts covering General Motors (GM) have given the stock a “buy” recommendation.

Another 8% and 4% of the total analysts have recommended a “sell,” and the remaining 68% and 60% analysts have recommended a “hold” for Ford and GM, respectively.

Notably, there have been no major revisions in the analysts’ views of Ford and GM in the past month. But investors still have to pay attention to Wall Street analysts’ views. If a popular analyst changes her view of a stock, a significant short-term movement could occur in the stock price.

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Consensus price targets

On September 13, 2017, Wall Street analysts’ 12-month consensus target price for Ford stock was $12.13. This represents an upside potential of ~4.7% from its market price of $11.59.

The analysts’ consensus target for GM stock is $38.74, which shows a minor upside potential of 2.2% from its current market price of $37.89.

As of September 6, Ford stock has plunged 5.2% YTD (year-to-date), while GM stock has gained ~8.1% YTD.

Clearly, a higher percentage of analysts are positive about GM stock. GM’s solid second quarter earnings (IYK), compared with Ford’s mixed 2Q17 results, could be the key reason why more analysts seem confident about GM.

Continue to the next part of this series for a glance at how Japanese automakers Toyota Motor (TM) and Honda Motor (HMC) performed in China in August 2017.

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