NEW YORK (TheStreet) -- Ford Motor (F) - Get Ford Motor Company Report stock is plunging 4.83% to $11.82 in late morning trading on Wednesday after Credit Suisse analysts said auto volumes have peaked in the U.S., which is "the most critical market to sector earnings."
Since late in the 2015 third quarter, incentives and inventories have increased, while credit quality has deteriorated, indicating that volume growth remains flat, Credit Suisse said in an analysts note this morning.
"It's been primarily on the car side, but that can't be discounted, given the difficulty of meaningfully adjusting near-term production mix," analysts added. "And catalysts in the near-term are likely to be negative, as the industry grapples with this shoulder phase."
Additionally, Ford's stock rating was downgraded to "underperform" from "neutral" at Credit Suisse because the firm favors General Motors Co. (GM).
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Ford's earnings before interest and tax guidance is at risk because of the Dearborn, MI-based automaker's "overly optimistic implied volumes and global inventories that have fallen meaningfully out of step with demand," analysts noted.
"We favor GM due to continued self-help costs savings, a favorable product cycle in '16/'17, very favorable inventory position in U.S., and a potential trough earnings scenario that should be less severe vs. F," analysts commented.
Separately, Ford has a "hold" rating and a letter grade of C+ at TheStreet Ratings because of the company's strengths, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth.
You can view the full analysis from the report here: F
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.