UBS downgraded General Motors (GM) to Neutral from Buy with a price target of $51, down from $64. The firm cut estimates to reflect the impact of tariffs on the company’s cost structure as well as the impact to auto demand. UBS assumes vehicles produced in Mexico and Canada have 50% U.S. content, so it applies a 25% tariff to 50% of the assumed $35,000 material cost per vehicle. It estimates that if left unmitigated, GM’s annual cost headwind from tariffs could be $5B. It cut estimates and downgraded the shares.
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