GM Stock Drops On Multiple Stock Downgrades, Price Target Cuts: Retail Dwindles

Shares of General Motors (GM) dropped by nearly 4% in Thursday’s pre-market trade after a stock downgrade and price target cuts by multiple brokerages over auto tariff concerns.

UBS downgraded General Motors 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 as well as auto demand, according to The Fly.

The firm estimates that if left unmitigated, GM's annual cost headwind from tariffs could be $5B.

Auto tariffs of 25%, applicable on vehicles imported into the U.S., became effective last week. Tariffs on auto parts are expected to follow.

Goldman Sachs lowered its price target on General Motors to $63 from $73 while keeping a ‘Buy’ rating on the shares.

The brokerage noted that tariffs would be a downside for both automakers and suppliers, although car manufacturers can partly mitigate tariffs with pricing.

However, it will be hard for the auto industry to fully pass on tariff costs in light of softening consumer demand, the brokerage added.

Mizuho on Thursday also lowered its price target on General Motors to $55 from $63 while keeping an ‘Outperform’ rating on the shares. Mizuho noted that the recently announced 90-day pause on reciprocal tariffs does not apply to auto and auto parts, implying continued uncertainty and negative impacts to automotive and analog stocks.

The three investment firms' new price targets imply an upside of between 12% and 38% from the stock’s closing price of $45.74 on Wednesday.

On Stocktwits, retail sentiment around GM fell by a point but stayed within the ‘bearish’ territory while message volume rose from ‘low’ to ‘normal’ levels over the past 24 hours.

GM shares are down nearly 11% year-to-date, but up by more than 4% over the past 12 months.

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