JPMorgan maintains GM stock Overweight with $64 target

Looking ahead, the analyst has adjusted the estimates for 2025 and 2026 downward to $10.35 and $10.15, respectively, from the previous $11.25 and $11.20. This revision is based on the expectation of lower U.S. electric vehicle (EV) pricing following the anticipated repeal of the Consumer Tax Credit (CTC) provision of the Inflation Reduction Act. Despite this adjustment, JPMorgan's December 2025 price target for General Motors remains unchanged at $64.00. According to InvestingPro analysis, GM appears undervalued at current levels, with the stock showing impressive momentum through a 54.83% return over the past year. For deeper insights into GM's valuation and access to 10 additional ProTips, including exclusive metrics and comprehensive analysis, consider exploring InvestingPro's detailed research report, part of its coverage of over 1,400 US stocks. According to InvestingPro analysis, GM appears undervalued at current levels, with the stock showing impressive momentum through a 54.83% return over the past year. For deeper insights into GM's valuation and access to 10 additional ProTips, including exclusive metrics and comprehensive analysis, consider exploring InvestingPro's detailed research report, part of its coverage of over 1,400 US stocks.

The analyst noted that the production at General Motors' highly profitable North American operations, which contribute the majority of the company's global automotive profits, was slightly better than anticipated and only 3% lower sequentially from the third quarter. In contrast, production in China, which has been more challenging for GM, was 50% better than expected. This rebound was driven by a significant 97% sequential increase in production from 338K units in the third quarter to 666K in the fourth quarter.

Despite the positive production figures, Brinkman pointed out that the flow-through to profits from stronger global production is limited by several factors. These include lower profit per vehicle in China, the popularity of lower-priced models like the Wuling Bingo and the Wuling Hongguang Mini EV, and the fact that GM only shares 44% of the profits from the SAIC-GM-Wuling joint venture. However, Brinkman expects an improvement in financial performance due to a rebound in sales combined with cost control initiatives and better fixed cost absorption.

A significant contributor to General Motors' fourth-quarter profits is expected to be stronger pricing in the North American market. GM's incentive spending as a percentage of Average Transaction (JO:TCPJ) Price (ATP) continues to decline, supporting an increase in GM ATPs by 2.8% sequentially. Brinkman forecasts a fourth-quarter EPS of $2.06, up from the previous $1.85 estimate, surpassing the Bloomberg consensus of $1.80. This results in a new full-year EPS prediction of $10.70, which is above both the prior $10.50 estimate and the company's guidance of $10.00-$10.50.

Looking ahead, the analyst has adjusted the estimates for 2025 and 2026 downward to $10.35 and $10.15, respectively, from the previous $11.25 and $11.20. This revision is based on the expectation of lower U.S. electric vehicle (EV) pricing following the anticipated repeal of the Consumer Tax Credit (CTC) provision of the Inflation Reduction Act. Despite this adjustment, JPMorgan's December 2025 price target for General Motors remains unchanged at $64.00.

In other recent news, SAIC Motor Corp., the Chinese partner of General Motors Co (NYSE:GM)., is anticipating a significant drop in its 2024 profits, as high as 90%. This decline is largely due to a writedown of the American automaker's joint venture in China and an ongoing price war. The company's net income for the year ending December 31, 2024, could fall between 1.5 billion yuan ($207 million) and 1.9 billion yuan, marking a decrease of 87% to 90% compared to the previous year.

In a related development, Cadillac, a division of General Motors, announced the production of the 2026 Cadillac LYRIQ-V, its fastest electric vehicle to date. Production is set to begin in early 2025 at General Motors’ Spring Hill Manufacturing plant in Tennessee. The LYRIQ-V has a Cadillac-estimated 285 miles of range and is expected to reach 0-60 mph in just 3.3 seconds using Velocity Max.

Meanwhile, the Federal Trade Commission (FTC) has taken enforcement action against General Motors and its subsidiary OnStar, for allegedly collecting and selling geolocation and driving behavior data without proper consumer consent. The proposed order would impose a five-year ban on GM and OnStar from disclosing such data to consumer reporting agencies. The FTC claims that GM engaged in deceptive practices by not clearly informing consumers about the collection and sale of their data.

According to Wells Fargo (NYSE:WFC) analysts, President Trump's intention to end the $7,500 Internal Revenue Code (IRC) EV buyer tax credits and pivot towards supporting fossil fuel programs could significantly impact the automotive industry. The analysts suggest that legislation to remove these credits could be introduced by May, notably affecting Tesla (NASDAQ:TSLA) and General Motors, whose models are predominantly eligible for the credits.

Lastly, a Consumer Financial Protection Bureau (CFPB) report revealed that the rate of auto repossessions at the end of 2022 exceeded pre-pandemic levels, indicating growing consumer risk in the $1.64 trillion auto loan market. The report also noted that lenders have increasingly been using third-party forwarders to manage the repossession process, which generally results in increased costs for consumers.

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