UBS is bullish on the auto sector
UBS initiated coverage on 13 auto stocks. The analyst hit Ford Motor Co (NYSE:F) with a “buy” rating and $15 price target, implying a 21% upside to last night’s close after praising its commercial segment, saying it should show better-than-expected resiliency and reduce headwinds from blue and electric car models. Meanwhile, UBS also called General Motors Co (NYSE:GM) a “buy.”
Coming into today, there’s plenty of room for other Wall Street brokerages to jump on UBS’ bullish wagon. Concerning F and GM, eight of 14 and eight of 17, respectively, rated the equities a “hold” or worse.
Auto stocks are higher across the board following the sector upgrade. Ford Motor stock, in particular, was last seen 3.2% higher at $12.85, as it looks to add to a 12.5% year-to-date lead. General Motors stock, meanwhile, is up 2.1% at $34.19 at last glance, looking to add to its slim 0.5% 2023 gain.
Using options to get in on either could be a prudent play, as both sport low volatility expectations, with a tendency to outperform said expectations, to boot. This is per F’s Schaeffer’s Volatility Index (SVI) of 31%, which ranks in the low 13th percentile of annual readings. Meanwhile, its Schaeffer’s Volatility Scorecard (SVS) stands at 88 (out of a possible 100). Similarly, GM’s SVI of 32 is lower than 82% of readings, while its SVS stands at 92.