Key Takeaways
- Bank of America analysts said the auto industry will likely report positive results this quarter, but the future is far less certain.
- Companies could suspend or pull their guidance due to tariffs, the analysts said.
- If auto tariffs stay at or near current levels, BofA analysts predict that production and sales volumes will decline by nearly 3 million units.
Economic uncertainty remains a key factor in the outlook for the auto industry.
Bank of America analysts wrote Tuesday that they anticipate positive auto industry results this quarter, though uncertainty around tariffs and other factors could cause some companies to pull or suspend their guidance.
The first quarter of the year has likely shaped up better than expected for auto companies’ production and sales, the analysts wrote. Americans are “panic buying” cars so they can beat the heftier price tags that many expect in the wake of auto-specific tariffs.
However, the results may be less important as investors will likely be paying close attention to outlooks and increasing conversations around tariffs. The bank cut price targets across multiple carmakers, parts, and dealer stocks. One example is Tesla (TSLA), which reported weak deliveries earlier this month and missed Q1 earnings estimates on Tuesday.
Analysts said it will be hard for companies to provide expectations beyond the first quarter amid tariff uncertainty. The bank predicts that production and sales will decline by about 3 million vehicles if auto tariffs stay at or near current levels. This could lower operating earnings for General Motors (GM) by 11%, by 7% for Ford (F), 10 to 15% for suppliers, and 3% to 5% for dealers, they estimate.
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