As the outlook for auto sales continued to worsen, shares in automakers, suppliers and dealer groups fell sharply today as Wall Street and global markets suffered from fears surrounding Europe’s sovereign debt crisis. Hit the jump to read the rest of the story.
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More analysts are lowering their expectations for new vehicle sales the rest of the year, causing investors to shed shares of Ford Motor Co. and General Motors, which reached its lowest value since its IPO last November. Still, some analysts remained bullish, insisting that auto stocks may be a good buy.
As the markets closed, GM stock fell 5.37 percent to $23.60, losing $1.34. Early in the day GM shares fell to $23.29 — the lowest level since its $33 initial offering price last November.
Ford shares fell to $10.38, a 6.5 percent drop.
The market as a whole fared better than much of the auto sector. The Dow Jones industrial average lost 419 points, off 3.68 percent, closing at 10,990.
Suppliers also fared worse than the general market. Meritor Inc. was down more than 13 percent to $7.99 per share and TRW Automotive fell 10 percent to $38.25 per share.
Stock prices for all major dealership groups were also down. AutoNation fell 3.9 percent to $34.29, Group 1 Automotive plummeted 5 percent to $37.52 and Penske Automotive dropped to $16.26, a 6.9 percent drop.
Still, Barclays Capital was optimistic about a handful of auto stocks.
“Even with sales stalled and an uncertain macro environment, auto stocks look cheap after their recent pullback,” Barclays analyst Brian Johnson wrote in a stock report today.
But Barclays’ bullish outlook didn’t prevent the firm from lowering its price targets throughout the industry, dropping Ford from $20 to $15 and GM from $40 to $38. Barclays also lowered seating supplier Lear Corp. from $67 to $64, BorgWarner Inc. from $92 to $89 and American Axle to $12, down from $14.
