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Goldman Sachs analyst Mark Delaney slashed price targets on Tesla (NASDAQ:TSLA) to $1,000.00 per share (from $1,200.00), General Motors (NYSE:GM) to $46.00 (from $59.00) and Ford Motor (NYSE:F) to $14.00 from $18.00.
New price targets reflect “broadly” lowered estimates that mirror “additional supply chain constraints in the near-term, and weaker demand in the intermediate term.” A more cautious stance on estimates comes along with a more conservative GDP forecast from GS’ economics team.
Delaney also slashed the US SAAR forecast for 2022/2023 to 14.5 million from 15.75 million.
“The COVID-related restrictions in Shanghai have lasted longer than we had initially expected, and even with Shanghai moving to reopen, we believe that parts/components supply remains a risk in the near to intermediate term. In terms of demand, key metrics we monitor that correlate with auto demand, such as housing data and consumer sentiment, have slowed, and we’re reducing our global auto forecast in conjunction with our colleagues. Moreover, PMI metrics like the ISM index, and consumer demand datapoints, have also weakened,” Delaney told clients in a note.
The analyst expects volumes to continue rising with the latest search data showing strong EV demand, which is attributed to soaring gas prices.
Delaney prefers TSLA and GM, while is much more bearish on the “majority of the early stage companies with negative FCF in our coverage, especially those with what we consider as having limited competitive differentiation.”
“The rising interest rate environment will likely make it more difficult for early stage companies with negative FCF to raise capital,” the analyst concluded.
