While most knew that legacy automaker General Motors (GM) was likely to take a hit from tariffs, there were those who suggested that GM’s tariff hit was likely to be far, far bigger than others. A new report out from Bernstein suggests that the hit will indeed be bigger, and the analysts therein are screaming for an evacuation. The notion hit investors where they lived, and they fled accordingly, sending shares down over 3% in Monday afternoon’s trading.
Bernstein analyst Daniel Roeska, who has a four-star rating on TipRanks, cut General Motors’ ranking from Market Perform to Underperform, and also cut the price target substantially from $50 a share to just $35. That would represent a 21% drop against Friday’s close, reports noted. The new tariffs will indeed hit GM hard, and when you through in consumer sentiment that is clearly pitching against a big new purchase, the end result is a bad one for GM.
And this might be the best news GM can get; Roeska noted that the projections he used assume “…the most lenient tariff assumptions.” If the interpretations prove more stringent, he noted, the worst-case scenario could actually be twice as bad; the tariff impact “could double,” reports noted. Thus, Roeska looks for GM to “…lower guidance and try to conserve cash…until Q2 2026, when mitigation efforts and improving customer sentiment…” can kick in.
Even Cramer’s Against It
Roeska’s opinion here was supplemented by infamous stock pundit Jim Cramer, who noted that it might “prove futile” to buy GM stock, reports noted. Concerns about GM’s substantial Mexican presence certainly would not help matters when tariffs were on hand.
Further, Cramer looks for the problems herein to crop up fairly soon; once GM goes “…through the inventory,” as Cramer put it, and price hikes would become necessary to absorb the impact of tariffs, that would result in a situation where “…no one’s going to buy!”. Which in turn leads to a “…natural cut” for GM.
Is GM a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GM stock based on 10 Buys, three Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 2.62% loss in its share price over the past year, the average GM price target of $60.97 per share implies 41.3% upside potential.
