Shares of U.S. automaker Ford Motor Co fell greater than 10% on Thursday, after it warned the worldwide semiconductor chip scarcity might lower its second-quarter automobile manufacturing in half, a dour outlook for rivals and key suppliers.
Analysts stated the chip scarcity is getting worse as Ford additionally decreased its full-year outlook for earnings earlier than curiosity and taxes, even after handily beating Wall Avenue’s revenue estimate for the primary quarter, helped by pricing positive factors.
“Ford joins a rising refrain saying the semiconductor challenge will not be resolved till 2022,” RBC Capital Markets analyst Joseph Spak wrote in a observe.
The chip scarcity has compelled U.S. automakers to chop manufacturing of much less worthwhile autos, whereas permitting them to lift costs on their most worthwhile ones as demand surges, offsetting the manufacturing loss.
Analysts say that pattern will not final lengthy and costs will come down later within the yr, as the availability of chips turns into regular.
Shares of Ford’s bigger rival Basic Motors Co additionally fell over 4% on Thursday.
Ford’s decrease second-quarter manufacturing is prone to weigh on suppliers comparable to Visteon, BorgWarner, Tenneco, Lear Corp, Adient Plc, RBC’s Spak stated.
Shares of the suppliers fell between 1% and 5% in morning buying and selling.
“Whereas we imagine Ford has each alternative to execute a path that would obtain our $18 bull case valuation, we stay ‘underweight’ at the moment given our elevated issues round auto trade expectations broadly,” Morgan Stanley analyst Adam Jonas wrote in a observe.
Shares of Ford fell as a lot as 10.4% to $11.14, posting their largest one-day loss in additional than 10 months. Ford’s inventory remains to be up about 30% this yr.
