Rising gasoline prices could significantly change demand in the car market and question the strategy of many manufacturers. Against this background, Morgan Stanley favors this stock.
• High fuel prices could weigh on SUV demand and profits
• Morgan Stanley sees General Motors as a top pick in the sector
• Analysts are more cautious about Ford
An analysis by Morgan Stanley shows that rising gasoline prices could increasingly become a decisive factor for the automotive industry. While tariffs caused uncertainty in 2025 and at the same time led to high sales for manufacturers such as Ford and General Motors through purchasing incentives and strong demand, the focus is now on the price of oil. The ongoing conflict in the Middle East and restrictions on important shipping routes have caused energy prices to rise and are causing uncertainty along the supply chains for oil and raw materials.
High fuel prices could put pressure on car manufacturers’ strategies
If fuel costs remain high over a longer period of time, analysts expect that many consumers will postpone car purchases or opt for cheaper models, reports TheStreet. SUVs, which have recently been in high demand and accounted for more than half of new car sales in 2025, would be particularly affected. These vehicles in particular are particularly profitable for manufacturers because their margins are significantly higher than those for smaller cars. At the same time, many US car manufacturers have recently focused their production more heavily on SUVs, as electric cars are currently more expensive and less profitable.
However, continued high oil prices could put this strategy under pressure. Rising gasoline costs significantly increase current expenses. This could make electric vehicles more attractive because their operating costs are significantly lower when fuel prices are high.
Morgan Stanley sees GM as a favorite in the sector
Against this background, Morgan Stanley sees General Motors in particular as well positioned and confirms the share as a favorite in the sector. The company has proven to be robust even in difficult market phases and is currently valued comparatively low, with further upside potential.
General Motors shares lost 8.4 percent of their value in the first three months of this year and cost $74.50 on the US stock exchange NYSE at the end of March. In the long term, however, there is a strong performance: within twelve months, the shares gained around 58 percent in value.
It’s not just Morgan Stanley that is confident about General Motors shares: According to TipRanks, 19 Wall Street analysts have given a 12-month price target for General Motors in the last three months. Of them, 15 recommend the stock as a buy, while three analysts assigned a hold rating and only one analyst recommends the shares as a sell – this results in a moderate buy rating overall. The average analyst price target is $95.50, with a high forecast of $122.00 and a low forecast of $57.00. With the average price target, the analysts believe the share has an upside potential of 28.19 percent compared to the closing price at the end of March.
Analysts more cautious on Ford
Morgan Stanley, on the other hand, gave Ford shares an “Equal Weight” rating, even though they also see opportunities after price losses. “Ford’s recent share price decline also provides 20% upside to our $14 price target. However, we note potential negative impacts if the industry experiences an unfavorable shift in product mix (e.g. away from trucks),” TheStreet quoted the company as saying.
Ford shares have lost around 12 percent in value from the beginning of the year to the end of March and cost $ 11.54 on the US stock exchange NYSE at the end of the first quarter. Within twelve months, the shares were able to gain around 16 percent.
It’s not just Morgan Stanley analysts who are more cautious about Ford: According to TipRanks, 15 Wall Street analysts have given a 12-month price target for Ford in the last three months. Here only three analysts recommend buying the stock, while eleven analysts recommend holding the stock and one analyst recommends selling the shares, which corresponds to a hold rating overall. The average analyst price target is $13.88, with a high forecast of $17.00 and a low forecast of $10.00. The average price target represents a change of 20.28 percent from the March 31 closing price.
Even if a possible ray of hope for SUVs could be the insurance costs, as analyzes show that these are sometimes lower than for sedans, what remains crucial is how energy prices continue to develop – they could permanently shift demand in the car market.
Julia Walter, editorial team at finanzen.net
This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.
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