Who's The Big Winner From February Auto Sales?

UBS recently issued an automotive industry report highlighting their best performing automotive companies after strong February sales. UBS analysts wrote that Ford Motor Company (NYSE: F) was the biggest winner year-over-year. while General Motors Company (NYSE: GM) reported key metrics below expectations. Analysts maintained their Buy rating on both Ford and GM due to attractive valuations.

Colin Langan and Kohei Takahashi, analysts at UBS, wrote, "Ford (+170bps) was the biggest winner, while GM (-140bps) lost the most share y/y...On their call, Ford noted that pickup sales in Texas had its 'strongest month in play in some time,' potentially signalling a recovery in the biggest truck market in the US."

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Justification For Ford's Strength

Analysts at UBS gave one key reason why Ford showed strength this past month: SUV sales.

UBS noted that Ford reported record February results for its SUV's with sales up 28 percent year over year. This is a great sign for Ford as SUVs are among their most profitable vehicles. With persistent low gas prices, SUV sales have the potential to continue to increase, driving value for shareholders.

Going forward, UBS noted that both Ford and GM showed strong pricing power, which has the potential to drive earnings multiples in the near term.

At The Time Of This Writing...

Ford was seen trading at $13.51, up 2.16 percent on the day.

General Motors was seen trading up 2.69 percent on the day at $30.96.

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