Ford Slips as Toyota Rises After Report

NEW YORK (TheStreet) -- A Goldman Sachs(GS) analyst has cut his six-month price target for Ford(F) to $14 from $16 while lowering his outlook for 2010 U.S. auto sales.

Still, "we continue to prefer Ford on the light vehicle side where we believe current valuations are not giving the company credit for attaining the 6% operating margin we forecast by 2012," Patrick Archambault wrote in an investor note published on Monday.

He maintains a conviction buy rating on the stock.

Archambault also reduced his six-month price targets for TRW Automotive(TRW), which he has a neutral rating on, from to $32 from $43; Federal-Mogul(FDM), which he has a neutral opinion on, to $16 from $21; Goodyear Tire & Rubber(GT), which he has a buy recommendation on, to $14 from $18; Magna International(MGA), which he has a sell rating on, to $63 from $75; Dana(DAN), which is on his conviction buy list, to $14 from $17; Standard Motor,(SMP) which has a neutral rating, to $9 from $11; and Harley-Davidson(HOG), which is on his sell list, to $22 from $29 .

Despite his lowered price targets, Archambault sees the autos space as an attractive investment with a very favorable risk-reward profile in an environment where confidence is low and where sales have trended below replacement demand for 20 months -- which he thinks is unsustainable.

Archambault noted that he is lowering his 2010 light vehicle sales estimate to 11.7 million units from 12 million units previously, reflecting a slower-than-expected second quarter run rate. At the same time, Archambault isn't making changes to his 2011 and 2012 SAAR (seasonally adjusted annual rate) estimates of 13 million units and 14 million units "as we believe depressed consumer confidence and unprecedented lows in car buying intentions have created additional pent-up demand that will ultimately offset the slow start to the sales recovery."

Ford stock has slipped 1.1% to $10.17 Tuesday early afternoon, while rival Toyota(TM), which just issued another global recall -- this time due to potential engine problems in certain Lexus and Crown models -- has risen 2.7% to $70.11.

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-- Reported by Andrea Tse in New York

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