DETROIT (AP) -- Automotive stocks could get a needed boost when August sales figures for the U.S. are released on Thursday.
Citi Investment Research analyst Itay Michaeli said sales won't be as bad as expected despite some notable headwinds: car buyers anxious about stock market volatility; continued shortage of models because of the Japan earthquake; and automakers' reluctance to offer discounts.
Michaeli predicted that retail sales to individual buyers are likely to finish in the high 9 million range, about flat with July's 9.5 million. Adjusted for seasonal differences, August sales are likely to come in at a full-year rate of 11.9 million, down slightly from July's 12.2 million, Michaeli wrote in a note to investors.
The analyst expects Detroit automakers to hold their market share even though Japanese automakers, mainly Honda Motor Co. and Toyota Motor Corp., have restarted their factories and are starting to replenish dealership stocks. Michaeli predicted that General Motors Co. would perform well for the month, maintaining its roughly 20 percent share of the U.S. market.
Pickup trucks could gain the highest market share of the year in August, Michaeli wrote. That would favor GM, Ford Motor Co. and Chrysler Group LLC, which dominate truck sales.
Michaeli said 2012 estimated stock prices in the auto sector have fallen 5.1 percent on average during the past three months, but GM's estimate was cut 7.5 percent and Ford's was trimmed by 5.9 percent. This suggests that auto manufacturers' stocks have been hit harder than parts suppliers, Michaeli wrote. He wrote that automakers are more insulated than commonly thought from a low sales year, mainly because of pricing.
Michaeli wrote that he remains a buyer of GM and Ford because Detroit's market share and strong pricing are the surprise catalysts for 2011.
Ford shares were up 16 cents, or 1.5 percent, to $10.56 in premarket trading Monday. GM shares closed Friday at $22.87, up 57 cents, or 2.6 percent. But both stocks are showing a decline of 25 percent for the third quarter so far, with investors increasingly concerned about another economic slump in the U.S.