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Bear of the Day: Tata Motors (TTM)

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There has obviously been a lot of back-and-forth regarding potential tariffs between the US, China and Europe. I believe most of it is posturing but it still adds risk to the market place. If there’s one industry right now that doesn’t need more risk, it’s the automotive business. You have generational consumer shifts away from car ownership, used car prices that are falling through the floor, and interest rates on the rise here in the US. Now sprinkle in some protectionism in the way of tariffs and it makes foreign automakers especially frightening.

One such stock is today’s Bear of the Day, Zacks Rank #5 (Strong Sell) Tata Motors (TTM - Free Report) . Tata Motors Limited designs, manufactures, and sells a range of automotive vehicles. It operates through Automotive Operations and All Other Operations segments. The company offers cars, sports vehicles, trucks, buses, and defense vehicles, as well as related spare parts and accessories. It also manufactures engines for industrial and marine applications; aggregates, such as axles and transmissions for commercial vehicles; and factory automation equipment. In addition, the company provides information technology services, machine tools, and factory automation services; and vehicle financing services. It offers its products under the Tata, Daewoo, Fiat, Jaguar, and Land Rover brands. 

The reason for the unfavorable Zacks Rank is the recent move in earnings estimates. Analysts have been dropping their estimates for Tata’s current year and next year. The bearish sentiment has dropped the Zacks Consensus Estimate for the current year from $2.75 to $2.62 while next year’s number has been cut down from $3.49 to $2.95.

The bearish moves have helped push down the stock price as well. After trading up over $34 to start the year, shares of Tata are trading all the way down at $18 currently. The 50 and 200-day moving averages remain overhead resistance to the upside.

Investors looking for other stocks within the same industry should check out Zacks Rank #1 (Strong Buy) stocks Geely Automotive (GELYY - Free Report) and PEUGEOT (PUGOY - Free Report) .

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