U.S. autos: Rentals best positioned and suppliers worst amid Ukraine crisis - JPM

Gentherm

24/03/2022 12:24

** J.P.Morgan expects rental-car service providers to fare
best, followed by dealers and automakers, with suppliers to be
worst positioned in the U.S. auto industry following the Ukraine
crisis
    ** While direct impact on auto production may not be large,
the indirect impact on demand is potentially greater given
higher gas prices and low consumer confidence - JPM
    ** JPM prefers rental cars service providers Avis Budget
 CAR.O  and Hertz Global  HTZ.O , on benefits from lower
prospective rates of depreciation and bigger gains on sale when
they sell vehicles above their depreciated value
    ** Brokerage downgrades auto supplier Abc Technologies
 ABCT.TO  to "neutral" from "overweight", on lower industry
production and exposure to higher commodity prices
    ** JPM says demand for electric vehicles will benefit from
higher gas prices, but could also subsequently wane given higher
nickel and other battery metals prices 
    ** "Higher nickel and other battery metals prices threaten
to elongate payback periods given higher up-front price premiums
vs ICE (internal combustion engine) vehicles" - JPM
    ** Brokerage revises PT of following companies:
    
    
 Company           New PT  Old PT
 Ford Motor        $22     $23
 General Motors    $75     $80
 Tesla             $325    NA
 Ferrari           $230    $232
 Abc Technologies  C$7     C$8
 Adient            $38     $43
 American Axle &   $13     NA
 Manufacturing             
 Aptiv             $138    $155
 Autoliv           $97     $114
 Borgwarner        $59     $62
 Dana              $25     $26
 Gentex            $31     $33
 Gentherm          $73     $78
 Lear              $191    $201
 Magna             $97     $105
 International             
 Visteon           $113    $115
 Copart            $142    $145
 
    

 (Reporting by Siddarth S in Bengaluru)
 ((Siddarth.s@thomsonreuters.com;))