GM Gets Some Love: Street Calls of the Week
Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week: upgrades for GM and First Solar and downgrades for Albemarle, PayPal, and Take-Two Interactive.
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What happened? On Monday, Mizuho upgraded General Motors (NYSE:GM) to Buy with a $42 price target.
What’s the full story? The brokerage house opined that sentiment on GM was at a bottom, as weak consumer demand, coupled with the 25% United Auto Workers (UAW) wage hikes, and challenges in its Cruise and electric vehicle (EV) segments were reflected in 10-year valuation lows.
The analysts wrote that the UAW strike was in the rearview mirror, production had resumed, and they saw idiosyncratic catalysts for the company, such as: 1) 2024 estimated $1.5 billion UAW wage increases fully offset with ~$2 billion in fixed cost reductions, 2) refreshed EV ‘Smart Ramp’ focused on profitability, 3) pausing money-losing Cruise investments, 4) 2024 a better production year post-strike interruptions, and 5) $10 billion share repurchase buys back at least ~10% of shares outstanding over 12 months.
Mizuho wrote that with the stock trading near 10-year trough valuations, they felt compelled to upgrade GM to Buy.
Buy at Mizuho means “Stock's total return is expected to appreciate above the average total return of the analyst's industry coverage universe, on a risk-adjusted basis, over the next 12 months. “
How did the stock react? General Motors opened the regular session at $32.80 and closed at $33.08, a gain of 2.22%.
What happened? On Tuesday,
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