General Motors Company (GM Stock) and Ford Motor Company (F stock) are hoping their earnings results for the following week will persuade investors suspicious that their efforts over the past decade have been successful in unchaining them from the U.S. economic cycle.
Consumer demand has been hurt as a result of rising interest rates in the United States, higher oil prices, and economic slowdowns in the United States, Europe, and China. Wall Street suspects that both companies could fall short of their profit forecasts for 2022 or underperform next year because of these factors.
Analysts at Berenberg noted in a note that despite the fact that there has not been a significant decline in automobile demand so far this year, it is increasingly probable that there will be a decline in 2023.
General Motors and GM Stock Performance
General Motors (NYSE:GM) announces results Tuesday. After that comes Ford on Wednesday, which has previously warned investors that the company’s performance for the third quarter would fall short of their forecasts due to snarls in the supply chain and logistics. Investors on Wall Street have not waited to act on their concern that demand for automobiles is now beginning a long-delayed cyclical decline. Instead, they acted immediately.
Since Ford announced on September 19 that third-quarter profits will take a hit due to supply chain snarls and parts cost inflation, shares in significant automakers and auto dealer groups have plummeted. Additionally, used car retailer CarMax warned on September 29 of softening demand, which may have contributed to the decline.
Since the company issued its warning, shares of Ford have fallen by 19% and have lost more than half of their value since reaching a 52-week high on January 13. Since September 19, GM share prices have fallen by 19%. This month, they fell below $33, which was their price when they went public following their bankruptcy in 2010.
On Thursday, shares of Tesla Inc., the most valuable automaker in the world, slumped after the company cautioned it would not meet its full-year objective of boosting vehicle deliveries by at least 50%.
“At first it was Ford, then it was CarMax, and then it was Tesla. In the third quarter, there are likely to be many more missed expectations and negative outlooks added to the mix. Do not refer to us as bulls just yet “Adam Jonas, an analyst at Morgan Stanley, stated something in a note.
To this point, neither General Motors nor Ford has lowered its profit forecast for the year. Executives from both businesses have stated that demand is as high as ever and that stocks are still far lower than they were in the past. Because of low inventory levels, automakers in Detroit have reduced the amount of money spent on sales and marketing.
The president of General Motors’ operations in North America, Steve Carlisle, stated on Wednesday that the carmaker only has roughly 20 days’ worth of automobiles in stock at dealerships when before the epidemic there might have been as much as 90 days’ worth of vehicles in store.
Carlisle expressed his optimism over the remainder of this year at the Reuters Automotive USA conference held in Detroit. “We’re enthusiastic as we look towards the balance of this year,” “We closed up the third quarter on a powerful note in terms of sales. We have a positive outlook. However, it has a lot of energy.”
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Author Ivy Palinlin 
