GM stock drops on Bernstein downgrade. The problem: 'Earnings headwinds' and cost concerns.

Published On Sep 23, 2024, 3:05 PM

General Motors' stock (GM) has dropped following a downgrade by Bernstein from 'Outperform' to 'Market Perform'. Key concerns include economic headwinds and potential capital requirements that could arise during GM's upcoming Investor Day on October 8. Bernstein's analyst noted that GM's inventory levels are high, likely leading to discounts that may pressure profitability. Moreover, the ambitious EV production targets for 2024 are at risk of not being met, which could delay revenue from electric vehicles. Despite this, HSBC maintains a 'Buy' rating on GM, viewing it as the top pick among major automakers due to its lower valuation and growth prospects. GM shares were down over 2% on the downgrade news.

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Stock Forecasts

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Negative

Given the downgrade by Bernstein and concerns surrounding GM's electric vehicle production and high inventory levels, it is likely that GM's stock will face continued pressure in the short term. The upcoming Investor Day could provide additional insights that may influence stock performance, but the prevailing concerns suggest caution for investors. The mixed outlook, with some positive sentiment from HSBC, introduces uncertainty but does not mitigate the bearish signals from Bernstein.

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