General Motors Stock Falls As Analyst Sees Caution Signs On Road Ahead (CORRECTED)

Editor’s note: This story has been updated to reflect that Daniel Roeska, not Adrian Yanoshik, is the Bernstein analyst covering General Motors.

General Motors Co GM shares are trading lower Monday after Bernstein downgraded the stock from Outperform to Market Perform.

What Happened: Bernstein analyst Daniel Roeska downgraded General Motors on Monday and set a price target of $53, citing valuation concerns heading into the company’s October Capital Markets Day.

“GM shares have appreciated +85% since last November, but now our data signals rising earnings headwinds, and we think there is a risk the company will announce additional capital requirements during its October CMD. We want to wait and see,” the Bernstein analyst said in a new note to clients.

GM shares are up approximately 33% since the start of the year and have been trending higher since last October. GM refocused on shareholder returns toward the end of last year, announcing an accelerated buyback and then adding an additional $6 billion to its repurchase program in June. Roeska said the buybacks account for the stock’s recent outperformance, but he warned that headwinds are coming into play.

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The Bernstein analyst expects continued inventory build in the United States to lead to pricing headwinds in 2025. He’s also concerned that a delayed push into electric vehicles and Cruise could bring greater losses into play next year. As a result, the analyst lowered the firm’s 2025 adjusted earnings forecast by about 8%.

Roeska also noted that GM’s upcoming investor day could shed light on more headwinds ahead of the Detroit-based automaker. The analyst believes updates on key strategies could introduce additional capital requirements, which would ultimately weigh on the company’s ability to generate strong free cash flow in the near term.

“We are cautious about the company's future plans and are eager to hear the updated strategy at the CMD as we don't see GM's approach from last year being extended into its current strategy,” the analyst said.

“The company is not likely to meet its BEV sales target, it's announced a collaboration to work on new technology, has been struggling in China, and has not clearly defined its plans for Cruise. Each of these issues present a challenge to FCF generation in the short term.”

GM Price Action: GM shares were down 2.38% at $47.72 at the time of publication, according to Benzinga Pro.

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