Analysts at UBS dropped their rating and price target on the Ford stock forecast. Shares of Ford Motor Company (NYSE:F) plummeted in pre-market trading. The analysts cited a significant demand impact due to the impending recession in the United States as the reason for their action.

Ford Stock Forecast for Third Quarter

Before the group reports its earnings for the third quarter later this month, an analyst at UBS named Patrick Hummel downgraded his rating on the stock to sell from ‘neutral’ and reduced his price target to a new level of $10 per share. He did so, citing the possibility of a recession in the United States and the impact of a slowdown in its operations in Europe.

Ford stock forecast reported that September sales were strong last week, increasing by 16% compared to the same month last year to a total of 464,674 units. However, the company warned late in the month that clogged supply chains would cut into its bottom line for the third quarter due to “limits on the availability of certain parts as well as higher payments made to suppliers to account for the effects of inflation.”

Ford stated that as many as 45,000 vehicles missing specific components, which ultimately delayed their sale until the last quarter of the year, will remain in the carmaker’s inventory. Ford said these limits are likely to increase inflation-related supplier costs by approximately one billion dollars. Additionally, Ford stated that these costs would likely increase inflation-related supplier costs by approximately one billion.

This will result in a decrease in profit for the third quarter and its adjusted earnings, which the company estimates would fall between $1.4 billion and $1.7 billion. On October 26, Ford will release the company’s earnings report for the third quarter.

In addition, Hummel lowered his recommendation on General Motors GM from “neutral” to “sell,” noting the possibility that the company’s profits may be “more than half” the following year due to the fast-increasing destruction of demand. His new price objective for GM shares was $38, an 18% decrease from his previous forecast.

“Despite a 40% negative stock performance YTD, the rapidly deteriorating top-down picture makes it unlikely that GM’s strong EV story can drive shares higher with a 6-12 month view,” said Hummel. “[T]he rapidly deteriorating top-down picture makes it unlikely that GM’s strong EV story can drive higher with a 6-12 month view.”

In pre-market trading, Ford stock forecast shares were marked 3.88% lower, which indicated an opening bell price of $11.73 per. This move will extend the stock’s 2022 drop to around 43.5% if it continues.

In the meantime, shares of General Motors plummeted by 3.24%, putting them down to $32.53 per. This brings the stock’s loss for the year to date to almost 44.5%.