Analysts at RBC Capital Markets expect Ford to report its first annual loss since 2009 as Tesla delivers less in 2020 as a result of the new coronavirus outbreak, Bloomberg reported. GM will spend about $3.5 billion this year.
In a report on Monday assessing the impact of the new coronavirus outbreak, RBC Capital Markets analyst Joe Spak sharply cut the target share price of all 22 companies he tracks and downgraded four of them. He said his predictions were “dramatic, but reasonable” and that his team was concerned that they were not extreme enough.
“The situation is volatile, but it’s not hard to imagine that demand for cars will stop completely in the face of social alienation and increased consumer pressure,” Spark wrote. “Honestly, for a lot of people, once things have stabilized, buying a new car might not be that important. “
As of 10 a.m. New York time monday, Tesla’s shares were down 19 percent, while General Motors and Ford were down 14 percent and 11 percent, respectively.
In his report, Spark predicted that Tesla would maintain a sales rating, lowering its target price from $530 to $380, and that Tesla’s 2020 deliveries would fall to 364,000 units from nearly 368,000 units last year, even though the division has “comfortablely” More than 500,000 units have been set.
On a generally accepted basis of accounting standards (GAAP), Tesla expects a net loss of $104 million in 2020, compared with an earlier estimate of $1.53 billion, and $920 million in cash consumption, which was previously expected to be $1.7 billion in positive free cash flow.
For GM, Spark maintained its buy rating, lowering its target price to $33 from $49 and expecting adjusted EBITDA of $2.8 billion for 2020. It had been forecast at $8.39 billion; earnings per share for 2020 were $1.15, compared with an earlier estimate of $6.05; and $3.5 billion was expected to burn this year.
For Ford Motor, Spark maintains a holding rating, The target price was lowered to $6.50 from $9, with a forecast of $157 million for 2020, compared with a previous forecast of $6.12 billion, and an e.M.M. profit forecast of $422 million in 2020, down from an earlier forecast of $4.99 billion, and a 22 cent drop in 2020 earnings per share, compared with a previous estimate of $1.02.