Daniel Roeska, an analyst from Bernstein, maintained the Sell rating on General Motors. The associated price target was raised to $41.00.
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Daniel Roeska has given his Sell rating due to a combination of factors impacting General Motors’ financial outlook. One significant concern is the ongoing pressure from tariffs, which have resulted in a $1.1 billion hit in Q2 and are expected to continue affecting the company’s financial performance. Despite GM’s efforts to mitigate these costs through pricing and sourcing strategies, the broader political landscape suggests that these tariffs are becoming a permanent challenge, potentially hindering profitability in the near future.
Another critical factor is the financial strain from GM’s commitment to battery electric vehicles (BEVs). With the rollback of tax incentives, the economic viability of GM’s EVs is under threat, leading to potential margin dilution. The company faces a dilemma between cutting capital expenditures to protect short-term margins or continuing investments at the risk of alienating investors. These challenges, coupled with the market’s optimistic view of a quick earnings recovery by 2026, contribute to Roeska’s cautious outlook and Sell rating.
In another report released on July 23, Wells Fargo also maintained a Sell rating on the stock with a $38.00 price target.