4 big analyst picks: Ford and GM profits seen as 'resilient,' per UBS
Investing.com | Author Davit Kirakosyan
Published Sep 13, 2023 06:37AM ET
Investing.com -- Here is your Pro Recap of the biggest analyst picks you may have missed since yesterday: a buy initiation for Ford, and upgrades for Cintas, BRP, and UMB Financial.
InvestingPro .
The prior UBS analyst covering Ford and GM had Sell and Neutral ratings, respectively, on the stocks.
The analyst believes Ford's earnings will be "more resilient than expected," driven by the higher-margin Ford Pro segment, with the argument that it has better market structure with the company leading US share. The team forecasts significant growth in Ford Pro's earnings, estimating a 5% compound annual growth rate (CAGR) from 2023 to 2026 - far above consensus targets - believe the company's overall EPS will outperform consensus from 2024 to 2026.
Turning to GM, the analysts say negativity here is baked in and that the bottom line for its North American segment "can be more resilient than the market is pricing in." They also view potential earnings impact from a threatened strike by the United Auto Workers union as "transient," adding:
"Labor costs are likely to go higher, but we believe embedded (to some degree) in management's targets, and GM has proven to be sharper on costs so offsets are possible. A UAW settlement and 16 November analyst day could be catalysts."
Ford shares were recently up 2.8% to $12.80. GM was rising 1.6% to $34.
Cintas gains on BofA upgrade/h2
BofA Securities upgraded Cintas (NASDAQ:CTAS) to Buy from Neutral on Tuesday and raised its price target to $580.00 from $523.00.
The company is set to report its Q1/24 earnings on Sept 26. Street estimates stand at $3.65 for EPS and $2.33 billion for revenues.
Shares gained more than 2% Tuesday.
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