What the UAW strike means for the big auto stocks, according to top analysts

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Morgan Stanley and Citi cited the United Auto Workers strike on the 'Detroit Three' automakers as a promising entry point for investors.

Members of the United Auto Workers went on strike early Friday morning after being unable to reach a deal on a labor contract with General Motors , Ford and Stellantis , but there is a potential silver lining for investors: There may be a chance to snap up shares, said Morgan Stanley's Adam Jonas. "We think potential disruption from industrial action is likely to create buying opportunities in the D3 shares," the analyst said in a Friday note.

The analyst pointed to depressed valuations and the firm's prior view of "plausible labor outcomes" as drivers behind that call. Shares of the three big automakers were largely positive in midday trading Friday as investors appeared to shrug off initial headlines of the work stoppage. GM was up nearly 1%, while Stellantis added more than 2%. Ford shares were flat. What's next? How negotiations proceed from here will be key. Citi's Michaeli noted, "The weekend is key.

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