BofA Expecting Earnings Beat From GM, But Misses From Ford And Tesla: What Investors Need To Know

Although expectations in the automotive industry have been “set reasonably low” heading into the quarter, investors are likely to focus on outlooks for 2022 and beyond, according to BofA Securities.

The Automotive Industry Thesis: The general sentiment in the industry remains cautious “about the next shoe to drop (COVID Omicron implications, uncontemplated supply chain bottlenecks, etc.),” analyst John Murphy said in the note.

Given the global semiconductor shortage, expectations for volume improvement are “much more weighted to 2H:22,” Murphy wrote. A slew of headwinds in 2022, such as elevated technology and product costs and labor constraints, could exert pressure on margins as volumes return, he added.

“In total, we believe these factors could translate into fairly conservative 2022 outlooks from management teams at 4Q:21 reporting season,” the analyst further mentioned.

Also Read: IIHS Flags Past Concerns With Tesla And Other Automakers' Self-Driving Systems As It Launches Automation-Focused Safety Scores

BofA On Auto Majors: Murphy maintained a Buy rating for General Motors Company GM, with a price target of $100. He expects the company to report its fourth-quarter earnings at $1.27 per share, beating the consensus estimate of $1.11 per share.

Murphy expects Ford Motor Company F to report its quarterly earnings at 36 cents per share, significantly below the Street expectations of 44 cents per share. The analyst has a Buy rating on Ford, with a price target of $30.

The analyst reiterated a Neutral rating on Tesla Inc TSLA, while keeping the price target unchanged at $1,300. Murphy expects Tesla to report its earnings at $2.27 per share, missing the consensus estimate of $2.31 per share.

At midday Tuesday, GM stock was down 2.26% at $51.45, Ford shares were trading at $19.79 down 2.94%, and Tesla was down 2.28% with shares trading at $908.80.