Adrian Yanoshik (an analyst at Berenberg) initiated research on Auto OEMs, with four stocks being rated as Buy.

Market worries over slowing demand, continued supply chain headwinds and German carmakers BMW and Mercedes-Benz are all considered Buy by Stellantis (NYSE) as well as German automaker General Motors (NYSE)

GM is seen as “an opportunity as the market’s concerns about EV execution fade.” The price target on GM is $55.00 per share.

“The launch of a new EV crossover and pick-up should drive momentum, as should efficiencies from the company’s dedicated EV platform. GM will rationalise production more aggressively than its peers will, sustaining c10% margins,” Yanoshik said in a client note.

Tesla (NASDAQ) was started at Hold, with an initial price target of $900.00 per share. There are several issues.

“Plant efficiency may fall through 2022 based on Shanghai’s COVID-19 disruptions and related supply-chain bottlenecks. We believe investors underestimate the impact that raw material inflation has on battery prices. Tesla may be less aggressive when it comes to pricing in light of rival model launches, even though they have shown their willingness and ability to pass costs on.

The analyst remains cautious about Hold ($17.00 target price) because of slowing China’s sales growth.

“The Model e contribution may prove to be the key to Ford achieving its 10% EBIT margin target by 2026, with momentum just as essential for the stock’s re-rating… Ford’s Global Redesign has elevated the group margin potential to within reach of its 8% 2023 target, in our view. Europe will be close to meeting its target of 6% EBIT margin in 2023, according to our estimates. In China, however, we expect slowing sales growth in its Lincoln brand as momentum fades from model rollouts that began in 2019,” Yanoshik concluded.

By Senad Karaahmetovic