Most Analysts Recommend a ‘Buy’ for GM Stock before Q2



General Motors’ Q2 earnings expectations

In the previous part of this series, we looked at analysts’ expectations for General Motors (GM) in Q2 2018, which indicated a minor weakness. However, analysts expect a sharp recovery in its earnings trend later this year. Other than earnings estimates, investors should also be aware of Wall Street analysts’ ratings since they could have an impact on the stock.

Now let’s see what analysts are recommending for GM before its second-quarter earnings event.

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Recommendations for GM stock

According to data compiled by Reuters, 60% of the 20 analysts covering General Motors have recommended a “buy” for the stock, and 35% have recommended a “hold.” The remaining 5% (one analyst) suggested a “sell.”

As of July 17, GM’s consensus 12-month target price is $49.44, which is 23% higher than its market price of $40.03. Three months ago, analysts’ consensus target price for the company was $47.91.

The company’s efforts to protect its profitability amid concerns about the future of US auto sales could be one of the reasons for the optimism in analysts’ opinions. In addition, GM has been actively investing and staying ahead of the competition in autonomous and electric vehicle technology, which could help it expand its business in the near future.

Ratings for GM’s competitors

Analysts’ ratings for General Motors’ peers (IYK) and their 12-month return potentials are as follows:

  • Ford (F): Only 19% of analysts suggest a “buy.” Its target price reflects a 14% upside potential from its market price.
  • Fiat Chrysler (FCAU): About 59% of analysts have given it a “buy.” Its consensus target price reflects a 39% upside potential.
  • Honda (HMC): Half of the analysts have given it a “buy,” with a 28% upside potential.

In the next part, we’ll see what analysts are estimating for General Motors’ Q2 2018 revenue.


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