JPMorgan Analyst Makes Key Research Calls in Auto Sector

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JPMorgan has issued some very mixed analyst initiations this morning pertaining to the U.S. auto sector, which includes many of the key parts and systems providers in the group. Ford Motor Co. (NYSE: F) and General Motors Corp. (NYSE: GM) were both initiated as Overweight in this morning’s research call. The call is helping each auto company show gains north of 1% so far this morning.

What is interesting is that there is a very mixed bag out there in the parts sector. Overweight ratings were seen in the following stocks: Autoliv Inc. (NYSE: ALV); BorgWarner Inc. (NYSE: BWA); Delphi Automotive PLC (NYSE: DLPH); Gentex Corp. (NASDAQ: GNTX); Harman International Industries (NYSE: HAR); Tenneco Inc. (NYSE: TEN); and TRW Automotive Holdings Corp. (NYSE: TRW).

We saw at least three “Underweight” ratings that are acting as an overhang: American Axle & Manufacturing Holdings Inc. (NYSE: AXL); Magna International, Inc. (NYSE: MGA); and Tower International, Inc. (NYSE: TOWR). All three are in the red this morning.

Neutral ratings are effectively a nonstarter, as they are neither helping nor hurting shares in general: Dana Holding Corp. (NYSE: DAN); Johnson Controls Inc. (NYSE: JCI); Lear Corp. (NYSE: LEA); and Visteon Corp. (NYSE: VC). We are seeing mixed trading up and down in the Neutral ratings.

JON C. OGG

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