October Fright for Auto Stocks -- Overheard
October 19 2018 - 12:56PM
Dow Jones News
By Charley Grant
Halloween has arrived early for automotive industry investors.
At least it seemed that way on Friday after a frightful round of
corporate news.
Daimler warned that its full-year operating profit would be
"significantly below market expectations." The company said the
main reason for the guidance cut was higher expenses due to
"ongoing governmental proceedings" around the world regarding
Mercedes-Benz diesel vehicles. Shares fell nearly 3% on Friday.
Meanwhile, French tire manufacturer Michelin warned Thursday of
a "significant" decline in passenger car, light truck, and truck
tire markets late in the third quarter and continuing into the
fourth, particularly in China. The stock deflated by 9% in Paris on
Friday.
U.S. manufacturers weren't exempt. Analysts at Morgan Stanley
downgraded Ford Motor and lowered their price target to $10 a share
from $14. The stock is flirting with a multiyear low.
The notoriously cyclical auto business has had a surprisingly
good run since the crisis. No surprise, then, that investors have
become carsick when the road gets a bit bumpy.
Write to Charley Grant at charles.grant@wsj.com
(END) Dow Jones Newswires
October 19, 2018 12:41 ET (16:41 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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