Ford Motor Company (NYSE:F) is lower after reporting China sales earlier in the day and being downgraded by RBC Capital Markets to Sector Perform from Outperform.
Analyst Joseph Spak and team expect Ford's share price to consolidate for a while after the company broke over the $100B market cap level.
Spak and team point to near-term headwinds on Ford that include pricing pressure amid elevated costs and some recent weakness in shares of Rivian Automotive (NASDAQ:RIVN) for which it has a sizable stake in.
"We believe Ford will eventually sell down their RIVN investment (tactically) so from an enterprise value perspective we are effectively treating this as cash, however, we note that once it is actually cash and not the RIVN mark, that could be viewed as a negative catalyst for the shares."
The Detroit automaker is reported to have a 12% stake in RIVN.
Shares of Ford (F) are down 1.36% in premarket trading to $24.68. Rivian (RIVN) is down 1.07%.