Wolfe Research has initiated coverage on shares of General Motors (NYSE: NYSE:GM) with a Peerperform rating.
The firm highlighted several factors contributing to its neutral stance on the automaker's stock. Wolfe Research pointed to uncertainties surrounding General Motors' earnings outlook for 2025, with specific concerns regarding cyclical dynamics that could lead to price erosion, anticipated to create a 1-1.5% headwind according to their models.
Additionally, the trajectory of losses related to electric vehicles (EVs) was cited as a concern. Despite management's goals for achieving positive margins in the next year, investor skepticism persists due to soft demand trends and high structural costs associated with EVs, estimated at around $4.5 billion, as per the analyst from Wolfe Research.
The coverage also addressed issues in China, where General Motors has seen a significant drop in market share, and run-rate losses at joint ventures have increased by approximately $0.5 billion. Wolfe Research suggests that without substantial restructuring, these losses could widen further by 2025.
General Motors has been navigating a transformative period as the industry shifts toward electric vehicles and faces global challenges such as supply chain disruptions and changing market dynamics. The automaker's future profitability, particularly in the EV sector and its performance in the Chinese market, remains a focal point for analysts and investors alike.
In other recent news, the company has been directed to face a class-action lawsuit over allegedly defective transmissions in certain Cadillac, Chevrolet, and GMC vehicles. Meanwhile, GM has integrated BrightDrop electric commercial vans into the Chevrolet brand to leverage its extensive dealership and service network.
GM has also inked a deal with Samsung (KS:005930) SDI to establish a joint electric vehicle (EV) battery factory in the U.S., marking a significant step in expanding EV battery production capabilities. Additionally, GM is part of a new autonomous vehicle partnership with Uber (NYSE:UBER), set to offer customers self-driving vehicles from GM-owned Cruise starting in FY25.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.