This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

GM Could Dodge a Bullet as Auto Industry Sales Signal Renewed Growth

Detroit ( TheStreet) -- Auto industry sales reports for March seemed to signal a turnaround in the industry's fortunes after three weak months, and analysts said they expect GM (GM - Get Report) will be able to take advantage of it despite recall costs.

On the Ford (F - Get Report) sales call, John Felice, vice president, U.S. marketing, sales and service, said Ford "saw a big uptick (in sales) mid-month and then recall a very strong close." He said automotive "appears to be a very robust industry coming into the spring."

Ford said industry sales could gain about 5% in March, after being flat or down for the previous three months, a trend that raised the question of whether bad weather or slowing demand was to blame.

Ford sales analyst Erich Merkle said Tuesday the seasonally adjusted annual light-vehicle sales rate should be above 16 million for March, "more than what analysts were expecting." He added that Ford had a very strong final weekend in the close, (which) people probably couldn't pick up" in the forecasts made earlier. Much of the strength was in the retail sales side of the industry.

Must Read: Ford March Sales Gain 3%, Toyota Gains 5%, Jeep Gains 47%

GM was acting peculiarly Wednesday morning, delaying its sales report due to a "computer systems issue impacting dealer sales reporting." CEO Mary Barra was scheduled to appear before a House subcommittee at 2 p.m. EDT to discuss, among other things, a recall of close to 7 million GM vehicles.

Whatever the sales report shows, analysts who follow GM continue to recommend the stock, even after estimating recall costs. Shortly before noon, GM shares were up 42 cents to $34.83. Ford shares were up 54 cents to $16.14.

In a report issued Tuesday, J.P. Morgan analyst Ryan Brinkman reduced his first-quarter earnings estimate for GM to 24 cents a share from 40 cents. Analysts surveyed by Thomson Reuters are estimating 47 cents, with a range of 23 cents to 67 cents.

Brinkman reduced his full-year estimate to $3.50 a share: consensus is $3.65. He noted GM has estimated the recall cost to date to up to $750 million. Still, he has a buy on the shares and a $50 price target.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
F $13.43 0.00%
GM $31.25 0.00%
AAPL $94.88 -0.32%
FB $117.43 0.00%
GOOG $692.36 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs