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Home / Business / Ford, GM Rally as Goldman and China Warm Up for Cars

Ford, GM Rally as Goldman and China Warm Up for Cars



Ford Motor (F) and General Motors (GM) shares are outside their daily highs, but outperforming key indices following good news from China and a research report from Goldman Sachs.

According to reports, China said It weighed the option of halving the sales tax on auto sales. That's why the country's auto industry – the largest in the world – is shrinking in size compared to last year due to large revenue losses. The country is looking for a way to accelerate the purchase of new vehicles by lowering the tax rate from 10% to 5%, hoping to attract new buyers.

Both GM and Ford are up 3.4% and 4.3% respectively on Monday. It also has shares like Daimler (DDAIF) up 2% and while Fiat Chrysler (FCAU) off the highs is up 1

.5%.

While China now wants to boost its entire car market, the country has also been very friendly to electric vehicles (EVs). In particular, China has become the world's largest market for electric vehicles and continues to drive towards a cleaner, sustainable transportation industry.

This big market has recently enabled companies such as Nio (NIO) to go public, and this is one important reason why Tesla (TSLA) is accelerating its timeline for building its Gigafactory 3 manufacturing facility in China.

Tesla shares rose about 3% per day. This step also comes because one of its biggest investors is ready to buy more shares. Ford Ford leaves the way for Monday's big automakers. It's an interesting outperformer, especially given the stock's poor performance this year.

But that does not stop Goldman Sachs analysts from adding an extra boost on Monday as they switch from neutral to buy. They have also increased their price target by 33% from 9 to 12. As things stand, that means about 28% upside potential.

What's more, Ford has already reported revenue that Wall Street positively assessed in the face of the reaction. In addition, the stock pays a dividend yield of 6.7%, although the stock recovered significantly from a 52-week low of $ 8.17 a few days ago.

In 2019, Ford's profits should remain under pressure thanks to its North American activities. Analyst David Tamberrino said, but should bottom sometime next year.

Here is TheStreet's latest trade update on Ford Stocks.

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