The automotive industry is facing significant challenges, with Stellantis (STLA) being the latest to adjust its full-year outlook due to growing inventory issues and other industry-related headwinds. Bernstein senior analyst Daniel Roeska joins Market Domination to discuss his perspective on the auto industry's future.

Roeska observes that the US market is on a "path of mean reversion," explaining that car prices increased during the pandemic but have been gradually decreasing since. Regarding Stellantis specifically, he notes that in the US market, there's been a "situation" where car prices rose faster than those of competitors, "and the product quality didn't really catch up." This has led to inventory problems as a price correction becomes necessary. However, he adds that the European market, "while not great, is on a fairly decent path."

When it comes to the broader auto industry, Roeska recommends Ford (F) to investors. He states, "We still think that there is a benefit to owning Ford at this point. We have an Outperform on Ford because their Ford Pro business is really resilient. And they are starting to regain traction in the European EV market, and that will push them beyond consensus earnings in '25."

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This post was written by Angel Smith