The Ford logo is displayed on the sales lot at the Ford Store in San Leandro, California.
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The auto sector faces a number of headwinds that are too much for one analyst, who downgraded a couple of auto stocks, including shares of
Ford Motor. The downgrade is hitting Ford stock.
The stock has fallen 4% Thursday to $14.77. The
has declined 0.1%, while the
Dow Jones Industrial Average
was down 0.1%.
Barclays analyst Brian Johnson is the one who downgraded Ford (ticker: F). His rating went to Hold from Buy and his price target went to $17 a share from $23. It isn’t just Ford that Johnson is worried about—he sees risks to the entire sector from rising interest rates and inflation.
Inflation raises costs, squeezing profit margins unless higher prices can offset cost increases. Higher vehicle prices hurt affordability for car buyers. Higher interest rates also hurt affordability. Most new car purchases are financed and higher rates boost monthly payments.
Johnson has turned negative on the sector he covers and downgraded shares of parts supplier
Dana (DAN) to Hold from Buy. He lowered his price target on that stock to $18 from $24.
Johnson still rates
General Motors (GM) shares a Buy, but cut his price target to $59 a share from $68. Johnson rates
Tesla (TSLA) shares Sell. His price target remains $325 a share. Tesla stock closed Wednesday at almost $1,046.
Not everyone is as concerned as Johnson. Bank of America analyst John Murphy increased his Ford price target to $32 from $30 on…