Merrill slams door on DaimlerChrysler
By August Cole CBS.MarketWatch.com Last Update: 4:25 PM ET July 30, 2001 {} CHICAGO (CBS.MW) -- Merrill Lynch cut its intermediate-term rating on DaimlerChrysler's stock to "reduce" from "neutral" Monday, in part because the carmaker's recovery at its U.S. unit may get run off the road next quarter.
U.S.-listed shares of DaimlerChrysler (the world's No. 5 automaker, closed down 70 cents to $48.87.
"Chrysler admits that its Q3 result will be worse than Q2 due to the Dodge Ram run-out and lower shipments vs. Q2. It will also have to match higher incentives from Ford and GM and counter aggressive incursions by Japanese brands," wrote Merrill's Stephen Reitman in a note to clients.
He maintained that the company is on target to break even on the loss-making Chrysler unit in 2002.
Overall, Reitman said, the company's outlook is gloomy.
"In our opinion, the near-term sentiment risk remains on the downside," he wrote. Though he indicated a dividend cut is likely this year, he holds a long-term "neutral" rating on the company's stock.
The transatlantic auto giant is facing distinct pressure in the high-profit truck and SUV market. Plus, incentives from GM and Ford are drawing buyers at a time when overall industry sales appear to be declining from last year's record levels.
For the recently reported second quarter, DaimlerChrysler's results weren't as bad as many had forecast. The Stuttgart-based giant said profit fell to €700 million from the year-ago level of €1.7 billion. Sales slipped 5 percent to €41.5 billion. Though the Chrysler unit still lost money amid a corporate overhaul, the figure was narrower than most expectations.
na Stox Dude haste Deine puts noch ?
By August Cole CBS.MarketWatch.com Last Update: 4:25 PM ET July 30, 2001 {} CHICAGO (CBS.MW) -- Merrill Lynch cut its intermediate-term rating on DaimlerChrysler's stock to "reduce" from "neutral" Monday, in part because the carmaker's recovery at its U.S. unit may get run off the road next quarter.
U.S.-listed shares of DaimlerChrysler (the world's No. 5 automaker, closed down 70 cents to $48.87.
"Chrysler admits that its Q3 result will be worse than Q2 due to the Dodge Ram run-out and lower shipments vs. Q2. It will also have to match higher incentives from Ford and GM and counter aggressive incursions by Japanese brands," wrote Merrill's Stephen Reitman in a note to clients.
He maintained that the company is on target to break even on the loss-making Chrysler unit in 2002.
Overall, Reitman said, the company's outlook is gloomy.
"In our opinion, the near-term sentiment risk remains on the downside," he wrote. Though he indicated a dividend cut is likely this year, he holds a long-term "neutral" rating on the company's stock.
The transatlantic auto giant is facing distinct pressure in the high-profit truck and SUV market. Plus, incentives from GM and Ford are drawing buyers at a time when overall industry sales appear to be declining from last year's record levels.
For the recently reported second quarter, DaimlerChrysler's results weren't as bad as many had forecast. The Stuttgart-based giant said profit fell to €700 million from the year-ago level of €1.7 billion. Sales slipped 5 percent to €41.5 billion. Though the Chrysler unit still lost money amid a corporate overhaul, the figure was narrower than most expectations.
na Stox Dude haste Deine puts noch ?
