U.S. automaker Ford Motor Co may beat consensus estimates in the third quarter, an analyst at Barclays said, while raising his outlook for the quarter and upgrading the stock to equal weight from underweight.
Ford shares rose as much as 3 percent in early trade.
Ford continues to benefit from new and used-car pricing trends that should boost third-quarter results in Ford Credit, the company's financing arm, and in its North American operations, analyst Brian Johnson wrote in a note to clients.
Ford's European operations, however, may have been under pressure this quarter because of a weak pound/euro exchange rate as well as product mix, Johnson said.
In addition to government scrappage programs that skewed mix towards less profitable A and B segment cars, we believe the European region was also negatively impacted by a weaker pound versus the euro, the analyst wrote.
Still, Ford being the fourth largest player in Brazil is likely to have benefited from the robustness of the Brazilian market, Johnson added.
The analyst raised his price target on the stock to $8 from $7, and narrowed his third-quarter loss estimate for the company to 7 cents a share from 16 cents a share.
Analysts on average expect Ford to post a third-quarter loss of 15 cents per share, according to Thomson Reuters I/B/E/S.
Ford, the only U.S. automaker to have avoided bankruptcy, is targeting a return to profit by 2011 and has been gaining market share at a time when industry-wide sales remain weak.
Wall Street analysts see Ford as being in a stronger competitive position than rivals General Motors Co and Chrysler Group LLC, which were reorganized under government-supported bankruptcies in 2009. Ford shares were trading up 2 percent at $7.73 in morning trade on the New York Stock Exchange. They touched a high of $7.82 earlier in the session.
(Reporting by Tenzin Pema & Bijoy Koyitty in Bangalore; Editing by Himani Sarkar)