Analysts weigh in on Ford, praise Tesla

It truly is the opposite week, and a brand new Tesla bull is emerging from the woodwork; Bank of The U.S. analysts have a dismal report on consumer spending, and a move at Ford has Morgan Stanley worried.

Ich sprechen kein deutsch. Ich sprechen sie Tesla

Deutsche Bank has a brand new face covering auto stocks, and he seems very bullish about Tesla.

This week, analyst Edison Yu initiated his coverage of automotive stocks for the Frankfurt-based bank, handing out 'Buy' ratings with caution. In his note, he wrote that he seriously seriously is simply not always very optimistic about future earnings as the air across the greater auto industry starts to normalize.

“We see the U.S. auto industry within the later innings of a cycle which is already showing signs of normalization after a post-pandemic surge,” Yu wrote.

Though his wording feels like doom-and-gloom, Yu reassured that historically, "the American consumer has proven to be highly resilient.”

But as he sat at his computer and began to type, the reality was that American consumers were facing high interest rates that made car payments too high, inflated car prices, and a drop in used car prices, which may perhaps eventually trigger off a drop in new car pricing.

Related: Analysts weigh in on Chinese EVs, make predictions on Tesla's Robotaxi event

For that reason, Yu rated shares of Tesla rival Rivian (RIVN) , Ford (F) , General Motors (GM) and Polestar (PSNY) at Hold.

However it, he does make one exception: Tesla (TSLA) itself. Like Tesla bulls like Wedbush's Dan Ives, he sees it as "greater than a car company."

“We do now not see Tesla as an auto maker but rather a technology platform attempting to reshape multiple industries, deserving of a special sort of valuation framework,” wrote Yu.

He also noted that the Elon Musk-led automaker is “in a league of its own and represents our very best conviction secular leader, poised to reshape multiple industries across auto, energy, mobility, and robotics.”

Edison Yu gave Tesla a Buy rating with a $295 price target.

More Automotive:

• The Toyota Crown is a masterclass in cheap, quiet luxury
• Ford making radical change that would perchance anger loyal consumers
• Gavin Newsom's 'EV mandate' is below U.S. Supreme Court threat

BofA says consumers don't seem to be consuming [enough]

Following the same sentiment as Deutsche Bank's Edison Yu, the automotive industry is pretty an exceptionally good deal worthless if there don't seem to be people around to spend their genuinely-earned dollars, euros, yen, yuan, and pounds sterling on the metal boxes and 4 wheels that manufacturers spend billions to produce.

Consistent with a brand new edition of the patron survey conducted by Bank of The U.S. Global Research, big-ticket spending by consumers within america is down, including spending on homes, home renovations, home improvements, and, most significantly, new cars.

The research team found that the choice of individuals awaiting to buy a brand new car has been on a sequential decline since May this year, with 37.7% of those surveyed awaiting to cough up, versus 38.5% in August 2024 and 39.eight% in September 2023.

More worrying is that self belief in everyday spending, resembling expenditures at bars, restaurants, and food delivery, goes down. The oldsters at BofA found that over the subsequent three months, 18.Sixty seven% of individuals surveyed are awaiting to spend more eating and drinking out, and 14.Eighty% said they will order food more.

A missing pillar at Ford

While Ford's Model e electric vehicle division operates at a loss, one consistent money maker for the Blue Oval is its commercial vehicles division; known at the corporate as Ford Pro.

Within the 2d quarter of 2024, Ford's Model e division had an EBIT lack of $1.1 billion, while Ford Pro had an EBIT of $2.6 billion. Ford credits this to sales of its gargantuan Super Duty heavy-duty pickup trucks and the Transit van and subscriptions to Ford Pro software.

In a statement, Ford CEO Jim Farley credits an exceptionally good deal of the success to commercial vehicle customers' openness to adopting new vehicle technologies like connected cars and EVs sooner than individual consumers.

"The capabilities we’re developing in electric vehicles and software-enabled and physical products and services are wide competitive moats between Ford Pro and other companies," said Farley. "For patrons, from small businesses to the foremost important enterprises, they’re bridges to remodeling their organizations at the same time we’re remaking ours."

Related: Ford hands-free driving tech blamed for deadly DUI crash

On September 12, Ford announced that Ted Cannis, the CEO of Ford's Ford Pro division, will retire. The automaker credits him with turning the division right into a "high-growth, high-margin business" which is "a a ought to-have productivity accelerator for millions of business customers."

“Ted’s energy and passion for customers has been instrumental in building Ford Pro right into a business that’s tracking towards $70 billion in revenue this year – a Fortune 100-size company in its own right,” Ford CEO Jim Farley said in a statement.

Of individuals who also will miss Cannis is Morgan Stanley analyst Adam Jonas. He stated in an investment note on September 12 that his departure may perhaps be a "big loss" for the automaker, as he was “one of many vital foremost competent and well-respected leaders at Ford.”

Though Ford announced that Ford Blue president Andrew Frick also will lead Ford Pro on an intervening time basis until the corporate announces a brand new leader, Jonas stated that he expects Cannis' replacement to come from outside the Blue Oval, noting that “investors will examine unexpected departures of executives running highly a hit business units and ask if there are any underlying fundamental implications at play."

Related: Veteran fund manager sees world of pain coming for stocks