3 Auto Stocks Bombarded by Bearish Brokerage Notes

Auto stocks Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), and Tesla Motors Inc (NASDAQ:TSLA) received price-target cuts overnight

Jun 29, 2016 at 9:10 AM
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Apparently, it's a bad day to be an auto stock. Several car manufacturers have seen their respective stocks get hit with negative analyst notes, including Ford Motor Company (NYSE:F), General Motors Company (NYSE:GM), and Tesla Motors Inc (NASDAQ:TSLA). Below, we'll take a closer look at the mounting pessimism within the auto sector.

F received a trio of price-target cuts at Evercore ISI (to $12), Deutsche Bank (to $14), and RBC (to $13). The negative attention isn't necessarily unwarranted, as the shares have surrendered 12% of their value on a year-to-date basis, closing Tuesday at $12.39. The options crowd is also pretty skeptical of Ford Motor Company. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock has racked up a 50-day put/call volume ratio of 0.75 -- in the bearishly skewed 79th annual percentile. However, ahead of the open, F shares are pointed 1% higher.

The same trio of brokerage firms weighed in on GM, with all three slashing their price targets to $32. Yet, in pre-market trading, the stock has picked up 0.8%. Last night, General Motors Company settled at $27.74, not far from its 2016 closing low of $26.90, touched in early February. As with Ford, options players think GM's technical prospects are dubious, buying to open 1.43 puts for every call during the last 10 sessions at the ISE, CBOE, and PHLX. The corresponding put/call volume ratio registers in the 85th percentile of its annual range, hinting at a stronger-than-usual appetite for bearish bets over bullish.

Finally, TSLA is up 1.4% pre-market, despite receiving a price-target reduction to $220 from $242 at RBC. This is just the latest negative note levied on the electric automaker, since it offered to buy SolarCity Corp (NASDAQ:SCTY). The stock has paid a steep price on the charts amid these developments, sinking 16.2% relative to its most recent high of $240.85 in early June, to park at $201.79. If short sellers have their druthers, Tesla Motors Inc will continue to sink. A lofty 27% of the stock's float is sold short, which would take more than six sessions to cover, at TSLA's usual daily trading volume.

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