Yesterday evening, U.S. President Donald Trump signed an executive order that will place a 25 percent tariff on all vehicles imported into the U.S. starting April 3rd, 2025, which will be followed by tariffs on imported auto parts that don’t comply with the existing United States-Mexico-Canada Agreement no later than May 3rd. At the moment, there are a lot of uncertainties surrounding how these tariffs might impact costs for both automakers and consumers, and thus, Wall Street is also understandably concerned, with one analyst cutting their Ford stock price target as a result.
According to The Street, JPMorgan analyst Ryan Brinkman lowered his price target for Ford stock by $2 to $11 per share, as well as General Motors stock by $11, down to $53 per share. Meanwhile, Brinkman’s ratings for both stocks held steady at “overweight.” “We believe GM’s higher reliance on imports increases its vulnerability to proposed tariffs and creates more downside risk relative to peers,” Brinkman noted.
Brinkman stated in his memo that the new tariffs could cost Ford around $6 billion, but its cross-town rival GM could be on the hook for $14 billion. This is because 82 percent of Ford vehicles sold in the U.S. are produced domestically, and around a third of their parts come from other countries, while GM builds roughly half of their vehicles domestically for the U.S. market with only a third of those parts coming from American companies.
Earlier this month, Piper Sandler analyst Alexander Potter also revised that firm’s price target for Ford stock – down from $13 previously to $9 – though he left its neutral rating intact. Potter cited a few motivating factors behind this decision, most notably, concerns revolving around the company’s financial performance and market challenges. Potter did point out that Ford has several strengths going for it – including its robust truck and Ford Pro commercial business – which are reliable sources of income. However, Potter also noted that the profits Ford is making from those businesses are being offset by expenses from soaring warranty costs and slow EV sales across the globe.
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