February 9, 2023
GM, Ford shares tumble after UBS downgrades cite weakening demand

The Normal Motors world headquarters workplace is seen at Detroit’s Renaissance Middle.

Paul Hennessy | LightRocket | Getty Pictures

DETROIT — Shares of Normal Motors and Ford Motor every tumbled Monday after a pair of UBS downgrades citing expectations for weakening demand amid inflationary pressures.

Ford’s inventory was down by greater than 8% throughout intraday buying and selling earlier than closing at $11.37 per share, a decline of 6.9%. GM was off by as a lot as 7.5% earlier than closing at $32.29 per share, down by 4%.

Each GM and Ford shares are off about 45% 12 months to this point. Each corporations have a market capitalization of slightly below $50 billion.

UBS analyst Patrick Hummel wrote in notes to buyers Monday that he expects the U.S. automotive trade to be difficult for the foreseeable future following file revenue amid low provides and excessive demand through the coronavirus pandemic.

He predicted “it would take three to 6 months for the auto trade to finish up in oversupply, which can put an abrupt finish to a 3-year part of unprecedented” pricing energy and revenue margins for the automakers.

The funding agency downgraded Ford to “promote” from “impartial” and GM to “impartial” from “purchase.”

UBS continues to desire GM over Ford as a result of its momentum with electrical automobiles and fewer issues with manufacturing through the third quarter. Hummel mentioned UBS expects a “strong quarter” for GM, which is scheduled to report third-quarter outcomes on Oct. 25.

Ford final month mentioned elements shortages have affected roughly 40,000 to 45,000 automobiles, primarily high-margin vans and SUVs that have not been capable of attain sellers. Ford additionally mentioned on the time that it expects to ebook an additional $1 billion in surprising provider prices through the third quarter.

Ford is scheduled to report third-quarter outcomes on Oct. 26.

— CNBC’s Michael Bloom contributed to this report.

GM, Ford shares tumble after UBS downgrades cite weakening demand

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