Here’s what Wall St. experts are saying about these automakers ahead of earnings

General Motors (GM) is scheduled to report quarterly results before market open on Tuesday, January 30 with a conference call scheduled for 8:30 am EST, while Ford (F) is scheduled to report after market close on Tuesday, February 6, with a conference call scheduled for 5:00 pm EST. What to watch for:

GM SALES: In January, General Motors announced the company and its dealers delivered 2.6M vehicles in the U.S. in 2023, up 14% year-over-year. The company delivered 625,176 units in Q4, up 0.3% year-over-year. “GM has tremendous momentum. We grew our market share in 2023, maintaining strong pricing and low incentives. We led the industry in trucks and had great success with our affordable SUVs like the Chevrolet Trax and Buick Envista, some of today’s hottest-selling vehicles. In 2024, we expect industry sales to remain strong and we’re excited about the opportunities ahead as we expand customer choice with new vehicles like the Chevrolet Equinox EV and Cadillac Escalade IQ,” added Marissa West, GM SVP and president, North America. GM and its joint ventures delivered 2.1M vehicles in China in 2023.

GM PARTNERSHIPS, INITIATIVES: In October, GM Defense and Anduril Industries announced a teaming agreement, establishing a framework to collaborate on defense program capture activities. Additionally in October, GM Canada reached a tentative agreement with Unifor covering approximately 4,200 represented employees and partnered with Honda (HMC) to establish a joint venture for a driveress ridehail service in Japan. The company also terminated plans with Honda to jointly make affordable electric vehicles in October. In November, GM announced a collaboration with Niron for EV motor magnets and invested in the startup along with Stellantis (STLA). Additionally in November, the company announced that BrightDrop would become part of GM and GM Defense was awarded a Department of State contract for SUVs. In December, GM, EVgo (EVGO) and Pilot Travel Centers opened their first EV charging network and the company announced a collaboration with Autocar on zero tailpipe emissions commercial vehicles. GM Defense also entered an MOU in December for a collaboration with Jankel and the company partnered with Komatsu (KMTUY) on hydrogen fuel cell-powered mining.

CRUISE SUSPENSION: In October, The California Department of Motor Vehicles issued the following statement on the immediate suspension of deployment and driverless testing permits for GM’s Cruise: “The California DMV today notified Cruise that the department is suspending Cruise’s autonomous vehicle deployment and driverless testing permits, effective immediately. The DMV has provided Cruise with the steps needed to apply to reinstate its suspended permits, which the DMV will not approve until the company has fulfilled the requirements to the department’s satisfaction.” Following the suspension, Cruise said, “The most important thing for us right now is to take steps to rebuild public trust. Part of this involves taking a hard look inwards and at how we do work at Cruise, even if it means doing things that are uncomfortable or difficult…In that spirit, we have decided to proactively pause driverless operations across all of our fleets while we take time to examine our processes, systems, and tools and reflect on how we can better operate in a way that will earn public trust.” In November, Cruise also suspended supervised and manual car trips and Cruise CEO Kyle Vogt resigned. Daniel Kan, co-founder and chief product officer of Cruise, also resigned in November. The company also said its spend on Cruise will be down “hundreds of millions of dollars” in 2024 and laid off 24% of Cruise full-time employees in December.

UAW STRIKE: In September, the United Auto Workers union announced that thousands of its members at Ford, General Motors and Stellantis walked out, “marking the beginning of the Stand Up Strike.” UAW members at GM Wentzville Assembly, Local 2250 in Region 4, at Stellantis Toledo Assembly Complex, Local 12 in Region 2B, and at Ford Michigan Assembly Plant – Final Assembly and Paint, Local 900 in Region 1A are on strike. “This fight is our generation’s defining moment. Not just at the Big Three, but across the entire working class,” the UAW said in a statement at the time. Subsequently in September, UAW President Shawn Fain announced that the union was expanding its Stand Up Strike against General Motors and Stellantis at 38 locations across 20 states. At the end of the month, the UAW further expanded its strike against Ford and General Motors after contract talks failed to reach a deal. In an unannounced move, 8,700 UAW members walked off the job in October, shutting down Ford’s Kentucky Truck Plant in Louisville. In October, the UAW also announced 5,000 members joined the strike at GM’s Arlington Assembly. At the end of the month, GM and Ford reached tentative agreements with the UAW and in November, UAW members ratified the contracts.

ANALYST VIEW: In January, Redburn Atlantic initiated coverage of General Motors with a Neutral rating and $40 price target. The analyst launched coverage of nine automotive original equipment manufacturers, with a “cautious bias” driven by falling incremental returns. Margins face fading support, which had been provided by a resilient consumer and vehicle undersupply, the analyst said. Redburn expects the winners to iterate best-in-class electric vehicle platforms and scale desirable models to support high utilization at lower unit costs.

Meanwhile, Barclays raised the firm’s price target on General Motors to $44 from $37 and kept an Overweight rating on the shares. The analyst sees opportunity for Q4 beats across the auto and mobility space amid reduced expectations. The firm prefers manufacturers over suppliers near term, but the “inverse beyond that.”

FORD SALES: In November, Ford reported total October U.S. sales declined 5.3% from last year to 149,938 vehicles, with electric vehicle sales of 6,831 up 9.1%, Hybrid vehicle sales of 13,155 were up 37.9% and Internal Combustion vehicle sales of 129,952 were down 8.8%. In December, Ford reported total November U.S. sales of 145,559 vehicles, down 0.5% from 146,364 last year. Ford reports U.S. electric vehicle sales of 8,958 in November, up 43.2%, hybrid vehicle sales of 12,108, up 75.2% and internal combustion vehicle sales of 124,493, down 6.5% from the same month of last year. In January, Ford reported Q4 U.S. sales up 0.8% to 487,840 vehicles, including electric vehicle sales of 25,937, up 27.5% year-over-year, hybrid vehicle sales of 37,229, up 55.5% year-over-year, and internal combustion vehicle sales of 424,674, down 3.4% year-over-year. Ford 2023 sales totaled 1,995,912 vehicles, up 7.1% over 2022 and the best since 2020, the company stated. “In a year of challenges, from a labor strike to supply issues, our amazing lineup of gas, electric and hybrid vehicles and our fantastic dealers delivered solid growth and momentum. We have the products that customers want. I am especially proud Ford remained the No. 2 EV brand in America and our next-gen, digitally advanced new EVs are on the way,” said Jim Farley, Ford president and CEO.

FORD PARTNERSHIPS, INITIATIVES: In October, Ford announced the launch of the F-150 Lightning in Switzerland and named Kumar Galhotra as COO of global industrial systems. In November, the company said it was moving ahead with a “right-sized” version of the BlueOval Battery Pack project in Marshall and announced that is sold nearly 4,400 Lightning EV trucks in November. In December, Ford Pro announced a collaboration with Xcel Energy (XEL) on the deployment of 30,000 EV charging ports as well as a collaboration with Resideo (REZI) for the “EV-Home Power Partnership” project.

ANALYST VIEW: In January, JPMorgan analyst Ryan Brinkman lowered the firm’s price target on Ford to $15 from $16 and kept an Overweight rating on the shares ahead the Q4 report. The analyst increased estimates for General Motors and Ford on materially stronger than earlier expected global production and vehicle prices “which have moderated by less than was expected.” The reduced price target for Ford reflects modestly lower out-year estimates.

Meanwhile, Redburn Atlantic analyst Adrian Yanoshik initiated coverage of Ford with a Sell rating and $10 price target. The analyst launched coverage of nine automotive original equipment manufacturers, with a “cautious bias” driven by falling incremental returns. The firm detects electric vehicle challenges at Ford.