After the Consumer Electronics Show focused on autonomous driving, Barclays analyst Brian Johnson expects the North American International Auto Show in Detroit “will get back to the here and now earnings drivers.”
The focus will be on trucks, tariffs, and taxes, Johnson tells investors in a research note on the U.S. Autos & Auto Parts sector. This includes a focus on key pickup truck launches, the potential for a North American Free Trade Agreement withdrawal to re-impose tariffs on autos and auto parts, and the impact of tax reform on earnings.
In this “back-to-basics world,” Johnson likes shares of American Axle (AXL) and Fiat Chrysler (FCAU). He sees Fiat as benefiting the most from tax reform and notes American Axle, his top pick, is the most levered to the U.S. large pickup market of any supplier he covers.
The analyst says he’s more confident in his Top Pick call and $25 price target on American Axle.
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