Goldman Sachs: Pressure on automotive OEMs and suppliers leads to lower earnings forecasts and target prices.

Goldman Sachs released a research report stating that by 2026, investors' holdings in the automotive sector are quite low, with a major focus on three main issues: 1) Industry sales trends; 2) Rising raw material and memory costs; and 3) Potential further policy stimuli. In addition, the report evaluates the impact of rising commodity and memory prices, and identifies potential profit margin impact based on assumptions of commodity price increases, cost pass-through to automakers, and different memory costs corresponding to different battery capacities and computing power. For the covered OEMs and suppliers, Goldman Sachs lowered the 12-month target price by up to 12%, while also cutting profit forecasts by an average of about 16% to reflect the weaker demand environment in January 2026 and the rising costs of raw materials and memory. The report mentioned that according to the China Base Metals monitoring in January, as of January 2026, metal prices for lithium, steel, aluminum, and copper ranged from a 9% decline to an 80% increase. However, the Goldman Sachs commodity team expects that the price increase for these metals for the full year of 2026 will slow down to around 0% to 23%. At the same time, the global semiconductor team at the bank expects that the prices of conventional DRAMs will increase by about 180% in 2026 compared to the previous year, with an 85% increase from the beginning of the year until now.