NEW YORK (Reuters) – Shares of Ford Motor (F) and General Motors (GM)fell about 5% on Wednesday after Morgan Stanley analysts downgraded the U.S. automakers, citing a challenging market environment marked by falling prices and growing competitive threats particularly from China.
Legacy U.S. automakers are faced with high inventories, falling prices, and signs of weakening consumer demand even as car manufacturers from Japan and South Korea, as well as electric vehicle makers, increasingly gain market share, Morgan Stanley analysts led by Adam Jonas said in an investor note.
Competitive pressure from China, which produces 9 million more cars than it buys, is also weighing on U.S. car makers, the analysts said.
Ford was downgraded to “equal weight” from “overweight”, while its price target was cut to $12 from $16. Its shares were down more than 4% at $10.42, on track for the biggest daily percentage decline since early August.
General Motors was downgraded to “underweight” from “equal weight” and its price target cut to $42 from $47. Its stock fell 5.2% to $45.58, making it the biggest daily percentage decline since early September.
EV maker Rivian Automotive and Canadian parts manufacturer Magna International were both downgraded to “equal weight” from “overweight”. Shares of Rivian were down 5.6% while Magna’s were off 3.6%.
(Reporting by Chibuike Oguh in New York; Editing by Alden Bentley)
