Analysts’ ratings on GM and Ford
According to the data compiled by Reuters, only 13% of the analysts covering Ford Motor Company (F) stock have given it “buy” ratings. In comparison, ~46% of analysts covering General Motors (GM) stock have given it “buy” ratings.
These ratings are based on the consensus of the 24 analysts covering both of these automakers as of February 13, 2018.
Another 79% and 46% of analysts have recommended “holds” for Ford and GM, respectively, while the remaining 8% of analysts have suggested “sells” for both companies.
On February 13, Wall Street analysts’ 12-month consensus target price for Ford was $12.27. This figure reflected an upside potential of ~15.9% from Ford’s market price of $10.59. Analysts’ consensus target price for GM stock was $48.35, ~16.8% higher than its market price of $41.4.
In the last few months, a higher percentage of analysts have turned in favor of GM and have recommended “buys” on its stock.
In the last 30 days, Ford stock has fallen ~17%, while GM stock has fallen ~4.1%. During this period, the stocks of other auto companies Fiat Chrysler Automobiles (FCAU) and Toyota Motor (TM) have fallen 7.9% and 1.6%, respectively.
Positive factors for GM
A higher percentage of Wall Street analysts are optimistic about GM stock at the moment than they are about its direct peer Ford. Consistent improvements in GM’s profit margins and its continued focus on US retail market share (IYK) could be two primary reasons why more analysts are confident about GM.
In addition, GM has accelerated its autonomous vehicle and electric vehicle development programs in the last couple of years, which could give it an edge over the competition.
GM is also far ahead of Ford, Fiat Chrysler, and Toyota in terms of US retail market share.
Continue to the next article, where we’ll take a look at how US automakers’ valuation multiples are trending after their January US sales reports.