Wall Street on Ford and GM
According to recent data compiled by Reuters, only 13% of analysts covering Ford Motor Company (F) stock have given it “buy” ratings. In comparison, a much higher percentage of ~46% of analysts covering GM stock have given it “buy” recommendations.
These ratings are based on the consensus of the 24 analysts covering both automakers as of March 8, 2018.
Another 79% and 46% of these analysts have recommended “holds” on Ford and GM, respectively, while the remaining 8% have suggested “sells.”
Target price for the next 12 months
On March 8, 2018, Wall Street analysts’ 12-month consensus target price for Ford was $12.20, an upside of ~15% compared to its market price of $10.61. At the same time, analysts’ consensus target price for GM stock was $48.35, ~27.8% higher than its market price of $37.84.
In the last three months, more analysts have turned favorable on GM and have recommended “buys” on its stock.
In the last 30 days, Ford stock has fallen ~12.8% while GM stock has fallen ~9%. In contrast, the stocks of Fiat Chrysler Automobiles (FCAU) and Toyota Motor (TM) have risen 21% and 4.1%, respectively.
What could drive GM higher?
A higher percentage of Wall Street analysts are optimistic about GM stock at the moment compared to the stock of its direct peer Ford. Consistent improvements in GM’s profit margins and its continued focus on its US retail market share (IYK) could be two primary reasons why more analysts are confident in GM.
GM has also accelerated its autonomous and electric vehicle development programs in the last couple of years, which could give it an edge over the competition.
In terms of US retail market share, GM is far ahead of Ford, Fiat Chrysler, and Toyota. Read on to the next article, in which we’ll compare US automakers’ valuation multiples in the wake of their February US sales reports.