GM Stock Gets Downgraded By Deutsche Bank Over Trump’s Tariffs: But Retail’s On Wait-And-Watch Mode

Deutsche Bank analyst Edison Yu on Monday downgraded automaker General Motors (GM) to ‘Hold’ from ‘Buy’ in light of the impact of tariffs.

Yu cut the company’s price target to $43 from $58. The new price target implies a downside of 1.4% from the stock’s closing price of $43.63 on Friday.  

Deutsche sees GM delivering “solid” first-quarter (Q1) results but withdrawing its full-year guidance as it implements a tariff mitigation strategy, according to TheFly.

Moving production into the U.S. to mitigate the impact of tariffs will likely not serve GM, the analyst opined.

“At the core, assuming these tariffs are truly permanent, GM will face structural challenges for years. … Should the company decide to onshore, this will naturally lead to lower profitability and higher capex (i.e., in turn, less free cash flow),” the analyst said, as reported by CNBC.

The analyst also opined that the United Auto Workers union will oppose any attempts to aggressively use automation and robotics.

In addition to being impacted by 25% auto tariffs imposed on vehicles imported into the U.S., Deutsche also sees GM being exposed to tariffs on steel and aluminum imports.

Last week, UBS also downgraded GM to ‘Neutral’ from ‘Buy’ with a price target of $51, down from $64, owing to the impact of tariffs on the company’s cost structure and auto demand.

Deutsche on Monday also lowered its price target on GM’s rival Ford Motor Co. (F) from $9 to $7 while keeping a ‘Hold’ rating on the shares.

However, Yu stood by his ‘Buy’ rating on EV maker Tesla, Inc. (TSLA).

“We continue to view Tesla favorably longer term as an embodied AI secular winner but acknowledge it faces many cross currents for the next quarter or two,” Yu said, as per CNBC.

On Stocktwits, retail sentiment around GM rose marginally from ‘bearish’ to the lower end of ‘neutral’ territory over the past 24 hours while message volume remained ‘low.’

GM stock is down by over 15% year-to-date but up by nearly 2% over the past 12 months.

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