The world headquarters of General Motors is seen at Detroit’s Renaissance Center.
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DETROIT – Shares of Synthetic engine and Ford Motor every Monday is messy after a few downgrades of UBS cited expectations of weakening demand amid inflationary pressures.
Shares of Ford were down about 7% in midday trading at $11.30 per share, while General Motors fell about 5% to trade at $31.80.
GM and Ford shares are both down about 45% so far. Both companies have a market capitalization of just under $50 billion.
UBS analyst Patrick Hummel wrote in a note to investors on Monday that his expectations for the US auto industry be challenged for the near future record profits amid low supply and high demand during the coronavirus pandemic.
He predicts “it will take three to six months for the auto industry to end its oversupply, which would abruptly end an unprecedented three-year period” of pricing power and profit margins. automobile manufacturers.
The investment firm downgraded Ford to “sell” from “neutral” and GM to “neutral” from “buy”.
UBS continued to prioritize GM over Ford due to its momentum in electric vehicles and fewer production problems in the third quarter. Hummel said UBS expects a “solid quarter” for GM, which is expected to report third-quarter results on October 25.
Last month, Ford said parts shortages affected about 40,000 to 45,000 vehicles, mostly trucks and high-margin SUVs that couldn’t reach dealerships. Ford also said at the time that it expected to put 1 billion dollars more in unexpected supplier costs in the third quarter.
Ford is expected to report third-quarter results on October 26.
– by CNBC Michael Bloom contributed to this report.
