General Motors stock has upside potential, UBS reiterates Buy rating

Investing.com - UBS reiterated its Buy rating on General Motors (NYSE:GM) with an $81.00 price target, suggesting significant upside potential from current levels. According to InvestingPro data, GM currently trades at $57.98 with a P/E ratio of 9.16x, while analysts’ targets range from $40 to $92 per share. The company’s overall financial health score is rated as GOOD.

The investment firm’s analysis using the UBS HOLT framework indicates that the market is not pricing in any margin recovery for the automaker and expects a decline in cash flow return on investment (CFROI). InvestingPro Tips highlight that 7 analysts have revised their earnings upwards for the upcoming period, with the next earnings report due on October 21.

UBS believes General Motors North America (GMNA) margins can return to the 8-10% range over the next two years, compared to consensus estimates of 6-6.5%.

The firm’s discounted cash flow (DCF) analysis points to a warranted price of $83 per share based on UBS estimates, representing approximately 49% upside potential from current levels.

UBS recently upgraded General Motors to a Buy rating, with the current price target of $81 remaining consistent with their previous valuation assessment.

In other recent news, General Motors announced it will record $1.6 billion in charges for the quarter ending September 30, 2025, due to a strategic realignment of its electric vehicle (EV) operations. This decision follows changes in U.S. government policy, including the termination of certain consumer tax incentives for EV purchases and a reduction in emissions regulations. The charges comprise $1.2 billion in non-cash impairment and other adjustments related to EV capacity, along with $0.4 billion for contract cancellation fees and commercial settlements. Additionally, the U.S. Energy Department is considering revoking nearly $1.1 billion in retooling grants awarded to Stellantis and GM last year. In another development, President Donald Trump is contemplating tariff relief for U.S. auto production, which could impact major car companies, including GM. Furthermore, GM is recalling 23,700 Chevrolet Equinox EVs due to an issue with the pedestrian alert sound system. These developments highlight significant shifts in GM’s operational and strategic landscape.

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