Barclays downgraded the U.S. autos and mobility sector to "negative" on Tuesday, warning that persistent tariffs under President Donald Trump’s trade policy could weigh heavily on automaker earnings and investment strategies.
Barclays on Tuesday downgraded its outlook on the U.S. autos and mobility sector from "neutral" to "negative," citing concerns that President Donald Trump's tariff policies could place significant pressure on automakers’ earnings and hinder future investments.
The assessment echoes similar warnings from Goldman Sachs, which last week lowered its 2024 forecast for U.S. auto sales by nearly one million units. While President Trump has paused certain levies and provided temporary exemptions for some Chinese products, tariffs on automobiles, steel, and aluminum remain in effect.
"In an increasingly difficult macroeconomic and regulatory environment, making a near-term investment case for the autos sector is becoming more challenging," Barclays analyst Dan Levy stated. "Auto tariffs appear to be persistent, and current valuations do not fully reflect the associated risks."
Stock Downgrades and Sector Impacts
Barclays downgraded General Motors (GM) from "overweight" to "equal weight," noting that nearly half of GM’s vehicles sold in the U.S. are assembled outside the country, including its entry-level electric vehicles (EVs) produced in Mexico. In contrast, Barclays expressed a "modest" preference for Ford (F), due to a larger share of its vehicles being manufactured domestically.
Several auto technology firms were also downgraded, with Barclays citing potential delays in the adoption of advanced technologies due to pricing pressures. Companies affected include Aptiv (APTV), Mobileye Global (MBLY), and Visteon Corp (VC).
In premarket trading, shares of GM, Aptiv, Mobileye, and Visteon declined between 1% and 3%, while Ford shares slipped 0.31%.
Revised Ratings and Price Targets
Barclays updated its ratings and price targets for several major firms in the sector:
Barclays' revised outlook reflects broader market unease over the durability of tariff policies and their long-term implications for the U.S. automotive industry.
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Start your day informed with AnewZ Morning Brief. Here are the top news stories for the 22nd of July, covering the latest developments you need to know.
Start your day informed with AnewZ Morning Brief. Here are the top news stories for the 23rd of July, covering the latest developments you need to know.
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Azerbaijani President Ilham Aliyev and German President Frank-Walter Steinmeier have discussed regional developments, transport connectivity, energy cooperation and the Azerbaijan-Armenia peace process during talks in Berlin.
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One soldier was killed and four others were injured after a UH-1Y Venom military helicopter crashed at the Czech Army's 22nd Air Base in Náměšť nad Oslavou, around 180 kilometres southeast of Prague, the Armed Forces said.
The European Union (EU) has agreed on a 21st package of sanctions against Russia, after shelving some proposed measures to appease member states, most notably Greece.
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Russia intensified attacks on Ukraine's Black Sea ports while Kyiv continued long-range drone strikes inside Russia, as U.S. Secretary of State Marco Rubio and Russian Foreign Minister Sergei Lavrov held talks that produced no breakthrough towards a ceasefire.
Thousands of protesters demanding the resignation of India's education minister briefly clashed with police in New Delhi late on Wednesday as demonstrations over alleged exam paper leaks entered their second month.
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