Analysts on GM stock
In the last couple of quarters, some analysts who had previously suggested “holds” on General Motors (GM), the largest US automaker, have turned positive. As of April 26, 71% of the analysts covering GM stock had given it “buy” recommendations, according to the latest consensus data by Reuters.
Another 24% of these analysts rated General Motors stock as a “hold,” while the remaining 5% expected it to fall and suggested “sells.” The data were based on the recommendations of 21 Wall Street analysts.
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Upside potential of 19%
Only ~55% of surveyed analysts were recommending “buys” on GM about six months ago, much lower than the 71% of analysts recommending “buys” on it now.
As of April 26, analysts’ 12-month consensus target price on GM was $47.21, reflecting a potential upside of ~19.0% from its market price of $39.68. About six months ago, the consensus target price for GM was slightly lower at $45.20, and since then, it has risen even higher than its all-time high of $46.76 since listing on the NYSE in 2010.
Recent recalls and tariffs
According to Thomson Reuters data, General Motors is expected to report adjusted EPS of $1.11 in the first quarter, down ~22.5% YoY (year-over-year). The company’s first-quarter revenue is likely to fall 2.5% YoY to $35.2 billion in the quarter, while its adjusted net profit margin is expected to be 4.5%, lower than its level of 5.7% a year ago.
As of April 26, GM has risen 18.6% year-to-date, which could be pricing in analysts’ weak estimates for its first-quarter earnings results. If the company reports better-than-expected earnings results on April 30, its stock could receive a positive reaction from investors.