Buy ford because a trump border tax would hurt gm, fiat chrysler more, barclays says

Buy ford because a trump border tax would hurt gm, fiat chrysler more, barclays says

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Investors should buy Ford Motor shares because it makes more of its cars in the U.S. than do peers, insulating it from a possible potential border tax implemented by the Trump administration


and GOP-led Congress, according to Barclays, which upgraded the automaker to overweight from equal weight. "Our move to upgrade Ford is predicated on the idea that the stock will


re-rate higher as investors better appreciate its relative advantages in a border adjustment scenario," analyst Brian Johnson wrote in a note to clients Friday. "Any way you look


at it, Ford looks better positioned than GM and FCA (Fiat Chrysler)." To offset a large corporate tax rate reduction, House Republicans aim to generate funds by taxing imports. Johnson


raised his price target for Ford to $15 from $13, representing 22 percent upside from Thursday's close. The analyst cited how 77 percent of Ford's U.S. vehicle sales are


manufactured domestically, highest among automakers and well over the industry average of 56 percent. In addition, he estimates the net import vehicle value [imports minus exports] is $3.6


billion for Ford versus $10.4 billion for General Motors and $18 billion for Fiat Chrysler . "We are encouraged by Ford's controlled U.S. inventory levels, and the strength in U.S.


pricing that we've seen not only to start 2017, but also in 4Q'16," he wrote. "If Ford remains committed to production discipline, and if the pricing environment is not


as negative as we initially feared, there could be upside to Ford estimates." — CNBC's Michael Bloom contributed to this story.