UBS on U.S. Autos and Auto Parts: Raising Numbers As Underlying Auto Sales Are Still Strong
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Rating Summary:
25 Buy, 13 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 13 | New: 14
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UBS on U.S. Autos and Auto Parts: Underlying Auto Sales Are Still Strong
Analyst, Colin Langan, said, "Based on our analysis of underlying demand, we are raising our 2012 US sales estimate from 13.6m to 14.5m. Our revised estimate is slightly above consensus of 14.3m. Improving leading indicators, particularly the recent improvement in U of M new car buying conditions, supports our more bullish outlook. That said, the US sales upside is likely capped at ~15m due to NT supplier capacity constraints."
"We also updated our market share estimates for GM (NYSE: GM) and Ford (NYSE: F) to reflect their YTD underperformance. We expect GM’s share will decline 180bps y/y though improve by ~20bp from their YTD level. We forecast Ford’s share will decline 60bps y/y, but improve ~100bps from their YTD level due to launches (Escape & Fusion). We are raising our EPS estimates by 2%-7% to reflect higher US sales."
"We are raising our price targets for F, GM, and Dana (NYSE: DAN) by ~7%, and our Lear Corp (NYSE: LEA) and AutoNation (NYSE: AN) price targets by ~3%. We are also lowering our px targets for BorgWarner (NYSE: BWA) and Sonic Automotive (NYSE: SAH) to reflect lower valuation multiples."
Analyst, Colin Langan, said, "Based on our analysis of underlying demand, we are raising our 2012 US sales estimate from 13.6m to 14.5m. Our revised estimate is slightly above consensus of 14.3m. Improving leading indicators, particularly the recent improvement in U of M new car buying conditions, supports our more bullish outlook. That said, the US sales upside is likely capped at ~15m due to NT supplier capacity constraints."
"We also updated our market share estimates for GM (NYSE: GM) and Ford (NYSE: F) to reflect their YTD underperformance. We expect GM’s share will decline 180bps y/y though improve by ~20bp from their YTD level. We forecast Ford’s share will decline 60bps y/y, but improve ~100bps from their YTD level due to launches (Escape & Fusion). We are raising our EPS estimates by 2%-7% to reflect higher US sales."
"We are raising our price targets for F, GM, and Dana (NYSE: DAN) by ~7%, and our Lear Corp (NYSE: LEA) and AutoNation (NYSE: AN) price targets by ~3%. We are also lowering our px targets for BorgWarner (NYSE: BWA) and Sonic Automotive (NYSE: SAH) to reflect lower valuation multiples."
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