General Motors (GM – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Daniel Roeska from Bernstein maintained a Sell rating on the stock and has a $36.00 price target.
Daniel Roeska’s rating is based on a combination of factors that suggest potential challenges for General Motors in the near future. One of the primary concerns is the impact of tariffs, which are expected to impose a significant financial burden on the company, with estimates suggesting a $4 to 5 billion hit in 2025 and potentially more in 2026. This tariff-related cost increase is seen as a structural shift rather than a temporary issue, which could affect GM’s profitability if not addressed.
Additionally, Roeska points out that GM’s decision not to raise prices, despite the increased costs, could lead to margin compression. This approach may be politically favorable but economically unsound, especially if tariffs persist and reset the industry’s cost structure. Furthermore, the assumption of stable consumer demand is questioned, as tariffs could tighten financial conditions and reduce consumer confidence, leading to a potential decline in demand. These factors combined lead to a cautious outlook for GM, justifying the Sell rating.
In another report released on May 1, Wells Fargo also maintained a Sell rating on the stock with a $34.00 price target.