The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

1344 GMT - Deutsche Bank says in a note that on a net-basis, it estimates Ford and GM could face a $4-$7 billion headwind on annualized EBIT from the tariffs. "While the Trump administration appears flexible on broader 'reciprocal' tariffs, the auto tariffs appear stickier and our assumption is they won't go away, representing a cornerstone in America's new industrial policy that demands onshoring," analyst Edison Yu says. Yu believes Rivian may have the cleanest set-up given its relatively small exposure to the tariffs and prospects for a strong R2 product cycle--subject to execution risk, he says. "We continue to view Tesla favorably longer term as an embodied AI secular winner but acknowledge it faces many cross currents for the next quarter or two," Yu says. Tesla is up 0.5% in early trading and Rivian gains 1.2%. (patrick.sheridan@wsj.com)

1332 GMT - Deutsche Bank says in a research note that its base care on the automobile sector assumes a "fairly strong 1H25 based on consumers pre-buying before prices begin to rise." But, that's followed by a decline in volumes in 2H25 as the tariffs flow through, driving up average transaction prices, leading to a U.S. seasonally adjusted annual rate of 15.4 million auto sales this year versus 16 million in 2024. Analyst Edison Yu says Ford and GM could see a gross cost increase of more than $10 billion while Tesla and Rivian see materially smaller increases, predicated on a 25% tariff on all imported vehicles and auto parts starting on May 3rd, but excluding US content on USCMA-compliant vehicles. (patrick.sheridan@wsj.com)

1217 GMT - (Dow Jones) Porsche's first-quarter pre-earnings call suggested a weaker-than-expected start to the year, while tariffs will also likely hit profitability in the remainder of the year, AlphaValue analyst Adrien Brasey writes. Given the U.S. accounts for around 25% of Porsche's deliveries, AlphaValue estimates that up to 28% of earnings before interest and taxes could be at risk as the group will not be able to fully offset the tariff impact. It lowers Porsche's 2025 sales estimate by 3% to 37.5 billion euros, well below the company's guidance of 39 billion to 40 billion euros. It also reduces the company's 2025 EBIT estimate by 20%, resulting in a return on sales of 8.5%. It downgrades Porsche to reduce from add and keeps its 43.50 euros target price. Shares rise 1.6% to 44.28 euros. (dominic.chopping@wsj.com)

1213 GMT - Any dilution to EU tariffs against Chinese EVs would go against the EU's own auto strategic action plan and would likely drive EU car prices lower, Citi analysts write. The EU is in talks with China to replace tariffs with a vague minimum price commitment for Chinese EVs, Citi says. Such a move would likely accelerate Chinese market-share gains in Europe and accelerate the decline of the EU manufacturer profit pool, the bank says. That would add to both China and U.S. profit pools that are already under intense pressure. Given a lack of growth in Europe and a declining opportunity for export sales, any acceleration in EU market-share losses would likely be followed by more permanent EU capacity closures, it adds. (dominic.chopping@wsj.com)

1113 GMT - Stellantis needs to think about deep cuts in the global production network as shipments continue to decline, Citi analysts write. The bank believes Stellantis is slowly mending its relationships with global stakeholders, but underlying shipments have remained weak and these are a prerequisite for stabilizing the company, it adds. First-quarter shipments fell by 117,000 units, or 9%, to 1.22 million cars. This is around 60,000 units below Citi estimates, led by a 20% drop in North America and 8% in Europe. First-quarter 2021 sales were at 1.6 million and first-quarter 2019 at 1.9 million units. "Apart from weak U.S. sales and pricing adjustments, U.S. import tariffs on RAM pickup truck production in Mexico remain the key overhang." Shares rise 4.5%. (dominic.chopping@wsj.com)

1059 GMT - Stellantis has been hit harder by auto tariffs than its Detroit peers, making it impossible to be confident on a U.S. turnaround, UBS analyst Patrick Hummel writes. Around 35% of Stellantis vehicles sold in the U.S. are imported, UBS says. In addition, after several quarters of severe market share loss, the company's aggressive plan to regain share in a likely shrinking U.S. market now has a lower likelihood of success, it adds. "Unlike Ford and GM, we see a high probability of losses in North America and a negative free cash flow." UBS downgrades the company to neutral from buy and lowers its price target to 8.80 euros from 16 euros. Shares rise 3.9% to 7.97 euros. (dominic.chopping@wsj.com)

1015 GMT - CreditSights analysts upgrade their recommendations on the corporate bonds of Toyota and Honda to market perform from underperform, mainly based on relative value and expectations that the effects of tariffs "will be manageable." Ford credit is upgraded to outperform from market perform. A likely S&P downgrade to BB+ "is reflected in spreads at current levels and we would expect spread tightening on a downgrade," the analysts say in a note. High-yield investors are likely to demand Ford credit upon a downgrade, causing credit spreads to tighten, they say. (miriam.mukuru@wsj.com)

0910 GMT - Some auto manufacturers' credit ratings are at risk of being downgraded due to the effects of tariffs on their profitability, CreditSights analysts say in a note. General Motors, Ford, and Nissan are considered to be the most susceptible to ratings downgrades. Hyundai could avoid a rating downgrade in the near term, however, partly due to its geographic diversification, the analysts say. (miriam.mukuru@wsj.com)

0504 GMT - Hyundai Motor's 1Q operating profit likely fell on year but largely met market consensus, Sangsangin Investment & Securities analyst M.K. Yoo writes in a note. Though the South Korean car maker has faced sluggish global vehicle sales, it may have gotten support from increased sales in the U.S., as well as solid global sales of higher-end environmentally friendly cars, including hybrid electric vehicles, Yoo says. Hyundai's 1Q operating profit may have dropped 9.2% on year to KRW3.4 trillion, compared with an FnGuide-compiled consensus forecast of KRW3.5 trillion. Hyundai's 1Q global vehicle sales fell 0.7% on year. Sangsangin cuts the stock's target price by 14% to KRW300,000 but keeps a buy rating. Shares are 0.9% higher at KRW179,100. (kwanwoo.jun@wsj.com)

0504 GMT - Hyundai Motor's 1Q operating profit likely fell on year but largely met market consensus, Sangsangin Investment & Securities analyst M.K. Yoo writes in a note. Though the South Korean car maker has faced sluggish global vehicle sales, it may have gotten support from increased sales in the U.S., as well as solid global sales of higher-end environmentally friendly cars, including hybrid electric vehicles, Yoo says. Hyundai's 1Q operating profit may have dropped 9.2% on year to KRW3.4 trillion, compared with an FnGuide-compiled consensus forecast of KRW3.5 trillion. Hyundai's 1Q global vehicle sales fell 0.7% on year. Sangsangin cuts the stock's target price by 14% to KRW300,000 but keeps a buy rating. Shares are 0.9% higher at KRW179,100. (kwanwoo.jun@wsj.com)

2342 GMT - Although Air New Zealand has "more than its share" of uncertainties at the moment, the airline is "well positioned" to navigate them, Macquarie analysts tell clients in a research note. They say the airline is dealing with a challenging backdrop, including a combination of engine availability, weaker domestic demand and elevated competition on U.S. routes, while economic uncertainty from the trade war will hinder consumer confidence. But falling fuel prices will provide a small tailwind in the near term and a transformation program from the airline could offset any slowdown in demand, the Macquarie analysts say. They note that the airline's stock is priced at a low multiple, and see shares rising to 83 New Zealand cents, from about 59 NZ cents in recent trade. (mike.cherney@wsj.com; @Mike_Cherney)

(END) Dow Jones Newswires

April 14, 2025 12:20 ET (16:20 GMT)

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