Ford, GM Rally and Goldman and China prepare for cars

Shares of Ford Motor (F) and General Motors (GM) do not reach their morning highs, but still outperform major indices after good news in China and a research report by Goldman Sachs analysts.

According to reports, China has indicated that it is considering cutting the tax on car sales by half. This comes as the country's auto industry, the largest in the world, is experiencing sharp declines in sales from one year to the next. The country is looking for a way to increase new vehicle purchases and by reducing the tax rate from 10% to 5%, it hopes to attract new buyers.

GM and Ford progress Monday, increasing by 3.4% and 4.3% respectively. It also has shares like Daimler (DDAIF) up 2% and, while it was at its lowest, Fiat Chrysler (FCAU) rose 1.5%.

While China is now looking to give a boost to its global auto market, the country has also been quite supportive of electric vehicles (EVs). More specifically, China has become the world's largest market for electric vehicles and continues to move towards a cleaner and more sustainable transportation sector.

This large market has recently allowed companies such as Nio (NIO) to go public, which largely explains why Tesla (TSLA) is accelerating its construction schedule for its Gigafactory 3 production plant in China.

For its part, Tesla shares rose about 3% on the day. This move also comes as one of its biggest investors is willing to buy even more shares. Among the major automakers, however, he leaves Ford in the lead on Monday. This is an interesting outperform, especially given the weakness of the stock this year.

But that does not stop Goldman Sachs analysts from giving him an extra boost on Monday, as they value neutral stocks in purchases. They also increased their price target by 33% from $ 9 to $ 12. Compared to current levels, this implies about 28% increase.

More so, Ford has already announced profits, which had been favorably perceived by Wall Street given the reaction. In addition, the shares generated a dividend of 6.7%, despite the significant rebound in equities after an 8-week low of $ 8.17 a few weeks ago.

For the year 2019, Ford 's profits are expected to remain under pressure thanks to its North American operations, said analyst David Tamberrino, but they should be at their lows next year.

Here is the latest update of TheStreet on Ford stock.

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