In a report released yesterday, Colin Langan from Wells Fargo assigned a Sell rating on General Motors (GM – Research Report), with a price target of $28.00.
Colin Langan has given his Sell rating due to a combination of factors impacting General Motors’ financial performance and outlook. The company’s Q4 adjusted EBIT of $1.76 billion failed to meet the Visible Alpha consensus estimate of approximately $2.0 billion, indicating a potential concern about the company’s earning capabilities. Furthermore, while General Motors’ FY24 adjusted EBIT guidance is above the consensus, suggesting a positive outlook, the anticipated earnings growth includes benefits that may not be sustainable, such as a one-time adjustment related to an Accelerated Share Repurchase.
In addition, GM’s multi-segment functionality showed combined results, with adjusted EBIT in North America just below consensus estimates but below Wells Fargo’s expectations. In addition, the corporate/other segment underperformed Wells Fargo’s consensus and estimates, suggesting underlying operational challenges. The report also acknowledges external pressures, such as emerging costs of hard work, pricing issues, and market composition, which can impair long-term functionality. These points lead to the sell score as they provide significant headwinds that can affect GM’s stock price in the long run.
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General Motors (GM) Company Description:
General Motors Company is one of the largest automakers in the world. The company is engaged in the design, manufacture, and sale of automobiles, trucks, and auto parts. The company is home to car brands such as Chevrolet, Buick, GM, and Cadillac. It operates in 4 operating business segments: GM North America, GM International, Cruise and GM Financial.
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