GM, Ford Shares Near New 52-Week Lows: Why UBS Is Concerned About Legacy Automakers

As consumer spending and pricing power decrease, the automotive industry continues to struggle. In another blow to the sector, UBS Group AG UBS lowered its 2023-24 earnings per share expectations Wednesday for General Motors Company GM and Ford Motor Company F.

What Happened: UBS analysts said they are concerned the companies will fail to meet expectations, as consumers are becoming less likely to purchase a car.

Due to inflation and a struggling supply chain, it has become increasingly difficult and costly for one to buy a car, leaving consumers hesitant to purchase.

Many consumers believe that it makes more sense to hold off on a purchase in hopes that prices will decrease in the coming months. 

A recent spike in gasoline prices due to the Russia-Ukraine conflict is making consumers more likely to buy a electric vehicle from companies such as Tesla Inc TSLA, at the expense of traditional internal combustion vehicles.

With all of these factors in mind, UBS analysts adjusted their 2023-24 outlooks for Ford and General Motors. 

The bank reduced its EPS predictions for GM from $77 to $56. In addition, UBS cut its Ford EPS prediction from $20.50 to $13, according to Investing.com.

How This News Impacts Investors: As expected, this news drove Ford and GM’s stock down Wednesday. 

Ford shares are down 2% to $10.98 in afternoon trading as it nears its previous 52-week low of $10.61, according to Benzinga Pro.

GM stock is down 3.57% at $31.22, nearing its previous 52-week low of $30.33, according to Benzinga Pro.

Also Read: Why General Motors Stock Is Sliding

GM CEO Mary Barra. Benzinga file photo by Dustin Blitchok.