Balanced Risk-Reward at GM: Robust Near-Term Performance Offset by Medium-Term Cost and Tariff Headwinds Supports Hold Rating

Analyst Philippe Houchois from Jefferies maintained a Hold rating on General Motors and keeping the price target at $85.00.

Philippe Houchois has given his Hold rating due to a combination of factors balancing GM’s solid near-term performance with meaningful medium-term uncertainties. He notes that management’s 2026 outlook is robust, with adjusted EBIT and free cash flow guidance slightly ahead of market expectations, helped by lower EV losses, improved warranty costs, and regulatory tailwinds. At the same time, he highlights that these positives are offset by sizable headwinds from higher tariffs, raw material and DRAM costs, as well as expenses tied to U.S. reshoring and increased software investment, which together materially weigh on the earnings and cash flow outlook.

Houchois also points out that recent quarterly results show continued operational discipline, with pricing and mix more than compensating for lower volumes and delivering margins broadly in line with consensus. Strong cash generation and a new share repurchase authorization signal continued shareholder returns, but he underscores that auto liquidity, restructuring outlays, and pressure on the finance arm’s earnings limit the scope for a more bullish stance. With the broader market environment described as stable rather than strongly growing, and China only expected to hold steady, he views the risk‑reward profile as balanced, justifying a Hold rather than a more aggressive rating.

In another report released on January 15, TipRanks – Google also downgraded the stock to a Hold with a $85.00 price target.