What Analysts Think about the Top 2 US Automakers



Analysts on top two US automakers

General Motors (GM) and Ford Motor Company (F) are the two largest automakers in the US market. According to the data compiled by Reuters, 24% of the analysts covering Ford stock gave it a “buy” recommendation. In comparison, a higher percentage of about 44% of analysts covering GM stock gave it “buy” recommendations. These ratings are based on the consensus of 25 analysts covering both these auto companies as of October 3, 2017.

Another 68% and 52% of total analysts recommended a “hold,” and the remaining 8% and 4% of analysts recommended a “sell” for Ford and GM, respectively.

Article continues below advertisement

Stocks moving beyond target prices?

As of October 3, Wall Street analysts’ 12-month consensus target price for Ford Motor was $11.91, which was about 3.5% lower than its market price of $12.34. Analysts’ consensus target price for GM was $40.26, which was also 7.3% lower than its market price of $43.45.

In the last one month, there haven’t been any major changes to analysts’ views on Ford, but the percentage of analysts recommending a “buy” on GM stock has risen 44% from 36% earlier.

As of October 3, Ford stock has risen 1.7% in 2017 so far, while GM’s stock was trading with handsome gains of about 24.7% YTD (year-to-date). Meanwhile, the S&P 500 Index (SPY) has risen by 13.0% YTD.

GM versus Ford

Interestingly, a higher percentage of analysts are optimistic about GM at the moment as compared to Ford Motor. GM’s solid August and September US sales data (IYK) along with its continued focus on boosting profitability could be the key reason why a higher percentage of analysts are confident on GM stock.

Continue to the next part where we’ll compare US automakers’ valuation multiples to see how they are trading against peers like Fiat Chrysler (FCAU) and Ferrari (RACE).


More From Market Realist