Ratings on auto stocks
In the previous part, we looked at analysts’ views on Tesla (TSLA). TSLA began the production of its long-awaited Model 3 in July 2017, but its 3Q17 deliveries fell well short of expectations of 1,500 units. However, the company reported solid improvement in its Model 3 production rate in 4Q17, which could be driving its stock higher in January 2018.
Now let’s look at analysts’ recommendations for the largest US automaker, General Motors (GM).
Analysts on GM stock
According to Thomson Reuters’ consensus data, 46% of analysts covering GM stock gave it “buy” recommendations. Another 46% of these analysts gave General Motors “hold” recommendations.
The remaining 8% of analysts covering the stock expect it to underperform and suggested a “sell.” On January 19, 24 analysts were covering General Motors.
By the 2017 US auto sales data, GM was the largest automaker (IYK) in the US. Similarly, GM’s US sales volume was much higher than other auto giants—including Fiat Chrysler (FCAU), Ford (F), and Toyota (TM)—in 2017.
Last year, Ford, TM, and FCAU ranked second, third, and fourth in the US market by sales volume.
The 12-month target
On January 19, 2017, GM’s 12-month consensus target price was $47.26 compared to $41.68 about three months ago. A price target of $47.26 reflected an upside potential of 9.5% from its market price of $43.15. This target price was also higher than GM’s all-time high (since its listing on NYSE in 2010) of $46.76 posted on October 24, 2017.
During its 3Q17 earnings conference call, GM’s management reiterated that the company would launch two new all-electric vehicles in the next 18 months, which are expected to compete with Tesla’s (TSLA) Model 3.
Continue to the next part to learn about analysts’ latest views on Fiat Chrysler stock.