Automobile giants like General Motors and Ford got a lowered outlook from a Morgan Stanley analyst due to coronavirus impact.
Analyst Adam Jonas reduced his 2020 U.S. Seasonally Adjusted Annual Rate (SAAR) from 15.5 million from 16.5 million. Jonas cited potential demand shock that could result from coronavirus fears would weigh on automaker's shares. According to Jonas, weakening consumer sentiment could lead to consumers potentially holding off purchases of expensive consumer discretionary items such new car that’s sells for around $35,000.
Jonas further suggested that if lending conditions tighten on recession risks, this could further impact the SAAR.
Even used car prices could face pricing pressure, according to Jonas.
Jonas slashed his price target for General Motors to $42 from $46 a share, while cutting his Ford target to $10 from $11.