UBS Warburg downgraded Ford Motor (F) to reduce from hold.
Analyst Saul Rubin says while he believes the company's dividend is secure in 2001, the combination of cash burn, deteriorating market share and industry conditions all pose a threat to dividend longevity. He says the company will likely choose a better credit rating over a higher dividend, but in the end, both may be cut.
Rubin thinks cutting the dividend will not make enough of an impact, and will leave some investors uncertain of the company's strategy. He projects a 41% slashing within the next 12-18 months as the reasonable way to rebalance payout ratios. He cut the $2.60 2002 EPS estimate to $2.00, and cut the $22 target to $20; citing heightened concerns over Ford's inability to stem market share losses.