Why Goldman Sachs Likes Ford Handily Over GM
Ford appears to be winning the battle with General Motors, at least according to Goldman Sachs.
Ford Motor Co. (NYSE: F) appears to be winning the battle with General Motors Co. (NYSE: GM), at least according to a key investment bank. Goldman Sachs has weighed in on these two key U.S. auto manufacturers, and the outlook is definitely in favor of Ford.
Ford was raised to Buy from Neutral and the price target was raised to $19 (versus a $15.29 close) at Goldman Sachs. Ford has a consensus price target of $17.35 and a 52-week range of $13.26 to $18.12.
Goldman Sachs downgraded GM to Neutral from Buy, and the price target was cut to $40 from $47 (versus a $36.30 close).
An instrumental driver for Ford was a strong growth outlook. The benefits from its pricing, volume and mix are starting to roll in from the F-150 launch, not to mention a stronger position in China.
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Separately, GM is suffering from weaker guidance in China. This is due to increased competition and rising GM truck incentives.
Despite this call, GM has actually had a better year than Ford. GM shares are up nearly 6% year to date, while Ford shares are up just 0.6% in the same time frame.
Ford announced Tuesday that it has begun a “Peer-to-Peer Car Sharing” program and a “multimodal mobility” solution. Under the car sharing plan, the company’s credit division is inviting 14,000 U.S. customers in six cities and 12,000 customers in London to register to rent their Ford-financed vehicles to prescreened drivers for short-term use. Ford’s customers will use a Web-based, mobility app from ride-share company Getaround, while London’s drivers connect through a similar rental system from easyCar Club. The company said that its customers were looking for ways to share the costs of vehicle ownership.
Seemingly this plan is in the same vein as Uber but with a slightly different twist. However, it is most definitely a big step forward for the auto giant in terms of riding this socially progressive wave.
Shares of Ford were up 1.6% at $15.53 on Wednesday afternoon. The stock has a consensus analyst price target of $17.35 and a 52-week trading range of $13.26 to $18.12.
GM shares were down 2.7% at $35.32, in a 52-week trading range of $28.82 to $38.99. The consensus price target is $42.63.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
