The Truth About Cars » Morgan Stanley http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 12 Sep 2014 13:00:57 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Morgan Stanley http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Tesla Is World’s Most Important Auto Maker, Says Tesla Debt Underwriter http://www.thetruthaboutcars.com/2014/06/tesla-is-worlds-most-important-auto-maker-says-tesla-debt-underwriter/ http://www.thetruthaboutcars.com/2014/06/tesla-is-worlds-most-important-auto-maker-says-tesla-debt-underwriter/#comments Mon, 23 Jun 2014 11:00:59 +0000 http://www.thetruthaboutcars.com/?p=849946 A recent research note from Morgan Stanley dubbed Tesla the “world’s most important auto maker”, on account of its innovation in the area of electric vehicles, autonomous cars and connectivity. Could there be another reason for such enthusiasm? Observers will remember that earlier this year, Morgan Stanley raised its share price for Tesla to $320 […]

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A recent research note from Morgan Stanley dubbed Tesla the “world’s most important auto maker”, on account of its innovation in the area of electric vehicles, autonomous cars and connectivity. Could there be another reason for such enthusiasm?

Observers will remember that earlier this year, Morgan Stanley raised its share price for Tesla to $320 per share, amid talk of Tesla disrupting the energy sector with is new battery-producing gigafactory. One day after that, Tesla announced a $1.6 billion debt offering underwritten by…Morgan Stanley.

In the case of the $320 share price target, analyst Adam Jonas was wildly optimistic about Tesla, even suggesting that the company could help bring about a “utopian society” by 2026. Jonas is also the same analyst labeling Tesla as the most important car maker…in the wuurrlld.

Coincdence? A massive breach of the Chinese Wall? Or a symptom of a press corp that is near-universal in its reluctance to “disrupt” Tesla’s brilliant PR narrative (hip, successful entrepeneur from Silcion Valley looking to topple one of Industrial America’s most sclerotic, antiquated industries)? Likely a combination of all three. Or, tell me why I’m wrong in the comments.

 

 

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Morgan Stanley Auto Product Guidebook Reveals GM Future Product Onslaught http://www.thetruthaboutcars.com/2013/02/morgan-stanley-auto-product-guidebook-reveals-gm-future-product-onslaught/ http://www.thetruthaboutcars.com/2013/02/morgan-stanley-auto-product-guidebook-reveals-gm-future-product-onslaught/#comments Wed, 13 Feb 2013 17:59:33 +0000 http://www.thetruthaboutcars.com/?p=477374   As a journalist, if you ask an OEM rep about any given car’s redesign or next generation, you’ll undoubtedly be met with a terse “we don’t comment on future product plans”. But if you’re an analyst? Different story. Yesterday, Morgan Stanley was kind enough to send TTAC a copy of their US Auto Product […]

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As a journalist, if you ask an OEM rep about any given car’s redesign or next generation, you’ll undoubtedly be met with a terse “we don’t comment on future product plans”. But if you’re an analyst? Different story.

Yesterday, Morgan Stanley was kind enough to send TTAC a copy of their US Auto Product Guidebook. This 88 page presentation is packed with all kinds of charts, graphs and qualitative information designed to help educate investors about car companies and the product they sell. If you’re a TTAC industry nerd, this is like getting a copy of EVO magazine’s Car of the Year issue.

Within the Guidebook, there was plenty of information on GM’s upcoming product offerings – stuff that’s usually speculation and conjecture in the autoblogosphere and the buff books. But we have reason to believe that Morgan Stanley’s chart is accurate. This is the bank that rolled out New GM’s IPO, and counts Opel head Steve Girsky and GM CFO Dan Ammann (who advised GM on its 2009 restructuring)  as alumni.

Among the products listed in the report:

Buick: A Verano hatchback is apparently due this year

Cadillac: A redesigned SRX is due in 2014 and a Fleetwood – possibly the Ciel/S-Class fighter – will bow in 2015

Chevrolet: For 2013, the Orlando will apparently debut, though we’ve seen no movement on this so far. A “small SUV”, possibly the Trax, is set for 2014, while the Volt CUV is back on for 2015.

GMC: Tumbleweeds

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Analysts Predict Doom For Car Industry, Market Shrugs http://www.thetruthaboutcars.com/2012/07/analysts-predict-doom-for-car-industry-market-shrugs/ http://www.thetruthaboutcars.com/2012/07/analysts-predict-doom-for-car-industry-market-shrugs/#comments Tue, 17 Jul 2012 14:23:51 +0000 http://www.thetruthaboutcars.com/?p=453085 Just when you thought shares of Ford and GM can’t get any lower, major brokerage Morgan Stanley “lowered its 2012 U.S. auto sales projections by about 3 percent and cut its earnings-per-share estimates for the North American auto sector due to weaker-than-expected sales in the United States and Europe,”Reuters says. For what it’s worth, Morgan […]

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Just when you thought shares of Ford and GM can’t get any lower, major brokerage Morgan Stanley “lowered its 2012 U.S. auto sales projections by about 3 percent and cut its earnings-per-share estimates for the North American auto sector due to weaker-than-expected sales in the United States and Europe,”Reuters says.

For what it’s worth, Morgan expects U.S. auto sales to be 14.4 million this year, down from its earlier projection of 14.8 million.  What is more disconcerting is Morgan’s outlook on financials of U.S. makers.

The firm cut its earnings-per-share outlook for GM by more than 10 percent to $3.40 per share. That’s still above analysts’ consensus of $3.25 per share.

Morgan Stanley now estimates Ford’s annual earnings per share at $1.26, down 3.1 percent from its previous forecast of $1.30.

Europe puts a sever drain on U.S. automakers. Latin America is soft. China is still good, but taking a breather.

The Ford and GM shares were unimpressed by the dire predictions and opened mostly unchanged today. Our Grade the Analysts ranking is likewise underwhelmed: Morgan Stanley usually takes bottom position when they show up and play.

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Morgan Stanley: Sendai Tsunami Will Wipe Out May SAAR. And Then Some http://www.thetruthaboutcars.com/2011/03/morgan-stanley-sendai-tsunami-will-wipe-out-may-saar-and-then-some/ http://www.thetruthaboutcars.com/2011/03/morgan-stanley-sendai-tsunami-will-wipe-out-may-saar-and-then-some/#comments Tue, 22 Mar 2011 15:42:09 +0000 http://www.thetruthaboutcars.com/?p=388277 Japan is, after China, the world’s second largest car producer. In the first ten days after the March 11th earthquake and tsunami, the Japanese auto industry lost approximately 65 percent of its capacity. That is 338,000 units. Toyota alone has lost production of about 140,000 vehicles since March 14, says AP [via MSNBC]. What will […]

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Japan is, after China, the world’s second largest car producer. In the first ten days after the March 11th earthquake and tsunami, the Japanese auto industry lost approximately 65 percent of its capacity. That is 338,000 units. Toyota alone has lost production of about 140,000 vehicles since March 14, says AP [via MSNBC]. What will happen next? Will it affect us, and how?

Amongst banks and brokers, staid Morgan Stanley is one of the respected ones. Morgan Stanley always had a presence in Asia and manages many Asian funds. Japan’s Mitsubishi bank owns 21 percent.  Morgan Stanley has no interest in talking Japan down. However, in a 34 page research note, sent out today, titled “Japanese Earthquake: Global Supply Chain Implications”, Morgan Stanley paints a dark picture: “A prolonged disruption of Japanese component supply could have a significant impact on 2011 auto production and profitability.” Not just in Japan, the world over. It is likely to depress sales: “ The impact on US SAAR could be severe in May.”

Instead of editorializing, let’s just give you the salient parts. You may want to have a stiff drink first. And your broker’s phone number nearby.

Globally, Morgan Stanley expects

A disruption to all auto manufacturers: It may take several weeks for companies to quantify the impact. A prolonged disruption of Japanese component supply could have a significant impact on 2011 auto production and profitability.”

Morgan Stanley sees prices going up across the board, but especially for Japanese models:

“Even the threat of supply shortages can be positive for industry pricing throughout the chain. OEMs and dealers would be hesitant to exacerbate the dwindling of finished inventory. Consumers interested in scarce Japanese product may rush to buy desirable product ahead of a shortage.”

When there will be no car carriers from Japan, and when transplants sit idle due to missing engines and transmissions, the Detroit 3 will see increased market share. Then, or maybe even earlier, the D3 will be hit by the same problems. Morgan Stanley calls it zero sum-game:

“There is little doubt that the supply disruptions in Japan will result in at least a near-term market share increase for the D3 at the expense of Japanese manufacturers. However, lengthy supply disruptions could have an impact even on US domestic players. GM management has told us that finding the affected suppliers and alternative sources is a top priority.”

Believe it or not, the Sendai tsunami could whack the recovering U.S. car market:

“Impact on US SAAR could be noticeable in April and potentially severe starting in May. Production slowdowns would not have a material impact on March SAAR, which we expect to come in around 13 million units.”

Good for manufacturers, bad for bargain hunters, the looming price war will be averted:

“Pricing is likely supportive as the industry manages even the potential for disruption in the supply chain. The events in Japan would push out market concerns about a price war that have been building in recent weeks. Strong pricing could also have a negative impact on the US SAAR number, while supporting the value of the market.”

In Europe, Morgan Stanley sees little cause for worry, except for Renault. Japanese brands have a smallish market share in Europe, European makers have an even smaller share of the Japanese market.

“Amongst OEMs, we highlight Renault as most vulnerable to disruptions in the sales and production network of its partner Nissan which accounts for ~70% of Renault’s PBT and 80% of its EPS.”

In China, Morgan Stanley expects more bad news for Japanese makers:

“Japanese brands accounted for 24% of total China car sales in 2010, with over 95% of sales from local production and over 80% local content (the rest imported from Japan suppliers). Recovery and resumption of the Japanese supply chain is more important than the OEM side. We may see further share shift to European and US brands and stronger pricing, especially in the middle-to-high end segment, where Japanese brands dominate (Accord, Camry, CRV, RAV4).”

Lastly, Morgan Stanley points out two critical uncertainties:

“What part of the supply chain is affected, for how long, and can the parts be re-sourced?

How long will inventory of finished vehicles and safety stocks up the chain last?”

Those are exactly the questions carmakers around the world are grappling with. Nobody seems to have the answer.

(If you have a Morgan Stanley account, hit up your broker for “March 22, 2011 Japan Earthquake: Global Supply Chain Implications.”  It covers all the big industries from steel to cell phones, from uranium to Gucci bags.)

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