BoA Cuts Ford, GM to 'Market Perform'
Banc of America downgraded Ford Motor (F ) and General Motors (GM ) to market perform from buy.
Analyst Ronald Tadross says extended warranties look like the latest weapon in the domestic automaker arsenal. He downgrades Ford and General Motors due to his belief they will be forced to match Dailmer Chrysler's recently-announced extended seven-year/70,000-mile powertrain warranty in order to protect its market share.
He notes infighting amongst domestics comes at a time when they are fiercely protecting share against foreign-based automakers. Tadross cut his $7.75 GM 2003 earnings per share estimate to $6.50, and trimmed the $0.95 Ford 2003 estimate to $0.45; he says there could be more downside, as industry pricing looks fierce.