Here's What Wall St. Experts Are Saying About These Automakers Ahead Of Earnings

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General Motors (GM) is scheduled to report quarterly results before market open on Tuesday, January 31 with a conference call scheduled for 8:30 am EST, while Ford (F) is scheduled to report after market close on Thursday, February 2, with a conference call scheduled for 5:00 pm EST. What to watch for:

GM SALES: In January, General Motors reported Q4 U.S. sales rose 41% year-over-year to 623,261 units and that its 2022 U.S. sales were up 3% year-over-year to 2,274,088 units. "GM is carrying strong momentum in North America into 2023. We see opportunities to grow our EV market share with nine all-electric models on sale, expand our truck leadership with four new Chevrolet and GMC heavy-duty and midsize pickups, and win new customers with the affordable and stylish 2024 Chevrolet Trax, which is the best entry-level vehicle we've ever built," said Steve Carlisle, GM EVP and President, North America, at the time.

GM PARTNERSHIPS, INITIATIVES: In October, GM Defense was selected by the Defense Innovation Unit to develop a battery pack prototype for testing and analysis on Department of Defense platforms. Additionally in the month, General Motors announced the introduction of Ultium Home and Ultium Commercial, which in combination with the existing Ultium Charge 360, create a holistic ecosystem of energy management products and services housed under a new business unit called GM Energy. The company also announced a collaboration with SunPower (SPWR) to develop a home energy system utilizing electric vehicles. GM also noted in October it had reached its goal of securing renewable energy to power all U.S. sites by 2025 and selected Lear (LEA) to supply the Battery Disconnect Unit on Ultium full-size SUVs and trucks. In November, GM partnered with Microvast (MVST) to develop specialized EV battery separator technology and build a plant in the U.S. The company also selected American Axle (AXL) as the new axle supplier for mid-size pickup trucks and entered an agreement with San Diego Gas & Electric (SRE) to explore vehicle-to-grid and vehicle-to-home technology. GM also entered a joint development agreement with Nel Hydrogen on renewable hydrogen production in November as well as a long-term nickel supply agreement with Vale (VALE). The company also announced an investment of $45M at its Bedford, Indiana foundry and a partnership with Domino’s (DPZ) to roll out 800 Chevy Bolt EVs. In December, GM’s BrightDrop added DHL Express Canada to its customer portfolio while Cruise announced passenger rides in San Francisco, Phoenix and Austin.

ANALYST VIEW: On Wednesday, JPMorgan analyst Ryan Brinkman lowered the firm's price target on General Motors to $57 from $59 and kept an Overweight rating on the shares. The analyst believes Tesla's (TSLA) "aggressive" price cuts could help "catalyze and accelerate what may have otherwise been a more modest or protracted pricing normalization process." The price cuts are positive for the consumer, negative for Tesla, negative for other automakers and potentially positive for parts suppliers, the analyst said. The firm reduced out-year estimates for GM to reflect price and mix headwinds but expects a slight beat in Q4.

Meanwhile, on Monday, Berenberg analyst Adrian Yanoshik downgraded General Motors to Hold from Buy with a price target of $41, down from $45. The analyst thinks the company will only reach a double-digit margin over the longer term as it will continue to face near-term challenges from mass-market affordability and cost inflation. Furthermore, GM's Cruise autonomous unit is a less likely catalyst for the stock in the year ahead as there appears to be less market appetite for autonomous driving narratives, the firm said. It downgrades the shares pending a better entry point.

FORD SALES: In November, Ford reported October U.S. sales down 10.0% versus last year to 158,327 vehicles. The company said, "Ford continues to see strong demand for its vehicles, with orders for '23MY vehicles up 134 percent over this time last year. The all-new Super Duty saw a record 52,000 orders in just five days. The F-Series continued as America's No. 1 truck, expanding its lead over our second-place competitor to more than 100,000 trucks this year. We doubled our electric vehicle sales. F-150 Lightning had its best monthly sales performance since launch." In December, Ford reported November U.S. sales down 7.8% versus last year to 146,364 vehicles. "Strong order demand continues with overall retail orders for '23MY vehicles up 104% compared to a year ago, driven by Super Duty and Maverick. Super Duty took in a record 152,000 total orders since order banks opened on October 27th. As the year closes out, F-Series expanded its lead to more than 117,000 trucks over its second-place competitor," said Andrew Frick, vice president, Sales, Distribution & Trucks, at Ford Blue, at the time. In January, Ford reported December U.S. sales up 3.2% to 179,279. “Much was accomplished in 2022, with Ford increasing its share of the industry by 0.7 percentage points. Delivering on our strategy, share expansion came from broad-based growth from our SUV lineup and our all-new EVs growing at twice the rate of the overall EV segment,” said Frick, at the time.

FORD PARTNERSHIPS, INITIATIVES: In October, Ford announced it had finalized its exit of previously suspended operations in Russia and that the Argo AI business would wind down. In November, Ford selected Rockwell Automation (ROK) at its vehicle operations primary controls and solutions provider for its next three electric vehicle assembly sites. Additionally in November, Wejo (WEJO) announced the U.S. expansion of its insurance offering with Ford. In December, the company invested GBP 12M in its Halewood Plant as well as GBP 2M in its E:PriME product development center. Additionally, in December, DHL Group signed a Memorandum of Understanding for 2,000 Ford E-Transit electric delivery vans. Ford also announced in December that it had broken ground on BlueOval SK BatteryPark with SK.

ANALYST VIEW: On Wednesday, JPMorgan analyst Ryan Brinkman lowered the firm's price target on Ford to $15 from $16 and kept an Overweight rating on the shares. The firm says an "undemanding valuation" keeps it positive on GM and Ford despite what may be a round of negative earnings revisions.

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