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8 months ago
JP Morgan Downgrades Auto Trading Platforms Amid Tariff Impact (Mar 28, 2025)
JP Morgan has downgraded several U.S. vehicle trading platforms, citing the negative effects of the Biden administration's newly implemented 25% import tariffs on vehicles and auto parts. The investment bank warned that prolonged supply disruptions and higher selling prices are likely to weigh on overall auto sales.Specifically, JP Morgan:Cut Openlane (KAR) and CarGurus (CARG) from Overweight to Neutral, andLowered TrueCar (TRUE) from Neutral to Underweight.For KAR, delayed recovery in lease expirations is a key concern. CARG faces the risk of slowing price momentum, while TRUE could suffer from potential delays in OEM partnerships and product adoption.JP Morgan estimates that the average transaction price (ATP) for vehicles could rise by $4,000 to $5,300 due to the tariffs, pushing monthly payments up by 9–12%. While the bank acknowledges that short-term shortages might boost used car demand and prices, it believes that, over the medium term, affordability constraints and rising parts costs could drag demand lower.However, JP Morgan maintained an Overweight rating on ACV Auctions (ACVA), citing its lower exposure to consumer-to-dealer (C2D) sales and structural growth potential in the dealer-to-dealer (D2D) marketplace.[Compliance Note]All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.
