MG:CC - Watch these auto stocks to outperform as supply chain risks hang over the sector

Goldman Sachs sweeps down over the automobile sector with lower earnings estimates and clipped price targets to better reflect additional supply chain constraints in the near-term, as well as the expectation for weaker demand in the intermediate term. "The COVID-related restrictions in Shanghai have lasted longer than we had initially expected, and even with Shanghai moving to reopen, we believe that parts/components supply remains a risk in the near to intermediate term," warned analyst Mark Delaney. Delaney and team also pointed to weaker readings for key metrics that correlate strongly with auto demand like housing data, PMI prints, and consumer sentiment. Goldman Sachs now forecasts global auto production of 79M units in 2022 vs. 82M prior view and 84M in 2023 vs. 86M prior view. The U.S. SAAR forecast for 2022 is reset to 14.5M units for 2022 and 15.75M for 2023, below the long-term average of about 16M. Patient

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Watch these auto stocks to outperform as supply chain risks hang over the sector