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Barclays on U.S. Autos & Auto Parts: Revisiting the Great Debate - My Trusty Old Pick-Up

May 24, 2012 4:37 PM EDT Send to a Friend
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Price: $17.57 -0.4%

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    10 Buy, 8 Hold, 1 Sell

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Barclays on U.S. Autos & Auto Parts: Revisiting the Great Debate - My Trusty Old Pick-Up

Analyst, Brian A. Johnson, said, "Our field trip to Detroit supports our view that 2013 will be a pickup truck showdown - with a surprising price gap for GM to close. While our meetings covered a wide range of macro and financial issues, much of the investor interest and discussion was around the 2013 pickup truck re-launch at GM. While most investors understand the unit magnitude (600k+ annual units) and potential to shift share, at least temporarily, we were somewhat surprised by the $4,000 price gap between the two firms' full size pickup products."

Johnson maintains an Overweight rating on Ford (NYSE: F)($37 price target), and thinks Ford fans believe their product is better engineered and more fuel-efficient. However, GM (NYSE: GM) ($15 price target) fans (OW-rated and Barclays Top Pick in OEMs) should look at the higher price difference as the 'glass half full' scenario, with a higher ticket equaling higher end margins (closing the gap on Ford).

Johnson noted the similarities in the two companies, stating both see Europe as challenging, but Brasil even tougher. As far as U.S., forecasts are for mid-14 million range, with a tailwind from positive housing starts. In the end, the wild card is China, with risk of a hard landing.




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