Berenberg Starts Tesla and Ford at Hold, General Motors at Buy
Berenberg analyst Adrian Yanoshik initiated research coverage on Auto OEMs with 4 stocks rated as Buy.
German carmakers BMW (OTC: BMWYY ) and Mercedes-Benz (OTC: DMLRY ), as well as Stellantis (NYSE: STLA ) and General Motors (NYSE: GM ) are all rated as Buy despite market worries about slowing demand and continued supply chain headwinds.
GM is seen as “an opportunity as the market’s concerns about EV execution fade.” The price target on GM is $55.00 per share.
“The launch of a new EV crossover and pick-up should drive momentum, as should efficiencies from the company’s dedicated EV platform. GM will rationalise production more aggressively than its peers will, sustaining c10% margins,” Yanoshik said in a client note.
On the other hand, Tesla (NASDAQ: TSLA ) is started at Hold with a $900.00 per share price target amid several concerns.
“Plant efficiency may fall through 2022 based on Shanghai’s COVID-19 disruptions and related supply-chain bottlenecks. Further, we think that investors underappreciate the lingering impact of raw material inflation on battery costs. Although Tesla has so far shown its ability and willingness to pass on costs through pricing, it may become less aggressive in the face of competitor model launches.
Finally, the analyst is also cautious on Hold ($17.00 price target) on slowing sales growth in China.
“The Model e contribution may prove to be the key to Ford (NYSE: F ) achieving its 10% EBIT margin target by 2026, with momentum just as essential for the stock’s re-rating… Ford’s Global Redesign has elevated the group margin potential to within reach of its 8% 2023 target, in our view. We expect Europe to nearly meet its 6% EBIT margin target in 2023. In China, however, we expect slowing sales growth in its Lincoln brand as momentum fades from model rollouts that began in 2019,” Yanoshik concluded.
By Senad Karaahmetovic
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