UBS analyst Joseph Spak has lowered the price target for Ford (F, Financial) from $10 to $9, maintaining a Neutral rating on the stock. Spak highlighted that recent changes in trade policies are escalating production costs, which in turn lead to higher prices for consumers and a decline in demand. These circumstances are anticipated to cause disruptions in production and pose financial challenges for suppliers.
The analyst pointed out that the automotive sector, known for its extended planning cycles, is not well-suited to handle such unpredictability. With supply chains developed over decades potentially requiring reconfiguration, there could be unplanned demands on capital. This situation suggests the industry may face significant hurdles due to the evolving trade landscape.
