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General Motors Co. (GM) is trading upwards consistently with the U.S. opening bell’s advance on Wednesday after recording a $0.50 loss consistent with the stock, exceeding estimates of $1.26. Revenues were in line with expectations of $16.8 billion, a year-on-year decrease of 53.4%. U.S. sales fell 34 percent from the same quarter of 2019, but advanced sequentially between April and June, down from 35% to 20% at the end of the quarter.
Traditional automakers were under pressure before the COVID-19 pandemic, as falling comparative sales raised fears of a cyclical slowdown. The outbreak showed suspicion, and major automakers reported sharp falls. Tesla Inc. (TSLA) is a notable exception in this equation, however, newcomers to electric vehicles may face similar headwinds as mass production increases in the coming years.
CFO Dhivya Suryadevara highlighted the strong demand for trucks in a post-launch interview, and highlighted the close inventories in this diversity of successful products. He said the automaker will be able to repay some of his debt at this time of year, reducing anxiety about the liquidity that has been affected by the crisis. The CFO also highlighted the sequential improvement, but concluded his comments cautiously that “the scenario with COVID-19 is very fluid.”
Wall Street’s consensus values inventory as a “moderate purchase,” based on 8 “buy” recommendations, 3 “hold” and 1 “sell.” Pricing targets vary lately from a minimum of $15 to $39, while inventory will open in this morning’s consultation to about $3 below the average target of $30. Accumulation seems limited despite the “buy the news” reaction, as the short policy is probably the driving force of this buildup, rather than investors fleeing the margin in reaction to a more positive outlook.
General Motors has performed below overall benchmarks since its all-time high in the 1940s in October 2017, in a decline that shattered the decline of the first quarter of 2015. The inventory rose to this point in May and sta stalled, initiating a test procedure that is still continuing, despite the accumulation this morning. It will now take around five building numbers to verify help and prepare the floor for another rally wave. This is unlikely without much more powerful quarterly revenue.
This article was originally published on FX Empire
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