TORONTO: Uncertainty about how US president-elect Donald Trump will apply tariffs has prompted an analyst at Toronto-Dominion Bank to take a dimmer view of two Canadian car-parts makers.

TD Cowen analyst Brian Morrison downgraded Linamar Corp to “hold” from “buy”, in part because “tariff uncertainty is bound to remain an overhang at least early into Trump’s presidency.” He slashed his target on the stock to C$68 from C$89.

A weaker fourth-quarter outlook and a lack of clarity over how Linamar’s industrial segment will perform influenced Morrison’s decision to take a less bullish view.

There’s still long-term value in the company, the analyst wrote, but it may become a “low multiple value trap” in the near term.

Morrison kept a “buy” rating on Martinrea International Inc but chopped his price target to C$13 from C$18, citing a cloudy production outlook and the risk of US tariffs. 

 - Bloomberg