Europe is a big topic throughout the entire stock market, but auto companies have specific concerns to deal with. The industry is doing quite poorly, which means that companies like Ford (F), General Motors (GM), and Toyota (TM) are struggling at the moment. This is not the only market that is hurting auto companies though. Honda Motor (HMC) and Toyota have another troubling situation to deal with related to the yen. Additionally, Tesla Motors (TSLA) and others may see slow growth in U.S. sales of plug-in-electric vehicles. All these auto companies have difficult situations to deal with. In this article, I will focus on why investors should be cautious when considering any of these five auto stocks.
The situation in Europe continues to worsen for major car companies, and Ford has received some negative press as a result. Ford has recently warned that second-quarter losses could be as high as $570 million or “triple the $190 million lost abroad in the first quarter.” This will lower investor confidence, especially since the situation was already bad enough before this quarter. Following the announcement, UBS (UBS) decreased its full-year per-share earnings estimate for Ford from $1.60 to $1.45. Ford stock (trading around $9 and a half per share) is sitting near the bottom of its 52 week range and there’s little to suggest it will climb back even to the middle of that.
This announcement may also make investors question Ford’s ability to handle struggling markets, but another announcement may help improve investor confidence a little more.To continue reading, click here.