UBS cuts General Motors stock target to $50, maintains neutral stance

On Friday, UBS analyst Joseph Spak adjusted the price target for General Motors (NYSE:GM) stock to $50.00, down from the previous $51.00, while keeping a Neutral rating on the shares. According to InvestingPro data, analyst targets for GM currently range from $34 to $83, with the stock trading at $45.44. The adjustment follows General Motors’ updated earnings outlook which, according to Spak, aligns with UBS’s predictions after recent tariff developments and is somewhat more optimistic than what the buy-side anticipated.

Spak noted that General Motors tends to set realistic targets, suggesting there might be potential for an earnings per share (EPS) beat against the new 2025 forecast of $8.65. However, he cautioned that this is contingent on market conditions remaining stable in the second half of the year. InvestingPro data shows GM currently trades at an attractive P/E ratio of 6.4x, though 5 analysts have recently revised their earnings expectations downward. The company maintains a strong free cash flow yield of 30%, suggesting significant value potential for investors. The analyst’s comments reflect a cautious stance on the Original Equipment Manufacturer’s (OEM) mid-term performance due to several factors including economic and consumer concerns, a cost structure that remains higher than before, and potential additional capital requirements for reshoring operations to the United States.

The report further elaborates on the challenges facing General Motors, such as the competitive environment where rivals Ford and Stellantis (NYSE:STLA) have extended employee pricing, which could influence investor sentiment. Spak’s remarks indicate that despite General Motors maintaining pricing at first-quarter levels, this strategy involves higher pricing relative to previous assumptions while expecting similar unit volumes. With annual revenue of $188.45 billion and relatively weak gross margins of 12%, GM faces ongoing profitability challenges. For deeper insights into GM’s competitive position and financial health, investors can access comprehensive analysis through InvestingPro’s detailed research reports, which cover over 1,400 top US stocks.

In conclusion, the UBS analyst has slightly lowered the price target for General Motors to $50, expressing a neutral outlook on the stock. This reflects a mix of cautious optimism about the company’s ability to meet its targets and concerns about broader economic factors and competitive pressures that could impact its performance. Based on InvestingPro’s Fair Value analysis, GM’s current stock price appears to be slightly above its intrinsic value, suggesting investors should carefully consider their entry points.

In other recent news, General Motors (GM) reported strong financial results for the first quarter of 2025, surpassing analysts’ expectations. The company achieved an adjusted earnings per share of $2.78, exceeding the forecast of $2.61, and reported revenue of $44.02 billion, surpassing the anticipated $43.26 billion. Despite these positive results, GM announced a reduction in shifts at its Oshawa Assembly plant in Canada due to decreased demand and trade challenges, affecting approximately 700 employees. Meanwhile, GM plans to increase production at its Fort Wayne, Indiana plant. Mizuho (NYSE:MFG) Securities recently lowered its price target for GM shares from $55 to $53, while maintaining an Outperform rating, citing a potential $5 billion impact from tariffs on GM’s 2025 profit forecast. GM also revealed that it would not meet its target of 300,000 electric vehicles by 2025, which could negatively affect suppliers like Wolfspeed Inc. (NYSE:WOLF) Despite these challenges, GM’s electric vehicle sales grew by over 90% year-over-year, and the company maintained a strong North American margin of 8.8%.

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