General Motors In Turmoil As UAW Strikes Ignite Financial Firestorm, Analysts Predict Multi-Million Dollar Meltdown
Portfolio Pulse from Nabaparna Bhattacharya
General Motors (GM) is facing financial pressure due to ongoing UAW strikes, with analysts predicting a multi-million dollar meltdown. Mizuho analyst Vijay Rakesh has lowered the price target for GM from $40 to $38, citing an EV ramp and UAW concessions pressuring margins. GM reported a 5.4% YoY sales growth in Q3 FY23 to $44.13 billion, beating the consensus estimate. However, a $200 million impact from the UAW strike weighed on margins. GM's net margin in SepQ was 6.9% with EV volume mix at ~3% vs. Tesla's net margins at 8%. Benchmark analyst Michael P. Ward reiterated a Buy rating on GM with a price target of $60.00.
October 25, 2023 | 9:21 pm
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POSITIVE IMPACT
Tesla's net margins stand at 8% despite 30-40% price cuts for Model 3/Y/X in 2023, outperforming GM's net margin of 6.9% with EV volume mix at ~3%.
Tesla's net margins are outperforming GM's, despite significant price cuts for its Model 3/Y/X in 2023. This indicates a strong financial performance by Tesla, which could have a positive short-term impact on its stock price.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
General Motors is facing financial pressure due to ongoing UAW strikes, with a $200 million impact on margins. The company's price target has been lowered by Mizuho analyst from $40 to $38. However, Benchmark analyst Michael P. Ward reiterated a Buy rating on GM with a price target of $60.00.
The ongoing UAW strikes are causing financial turmoil for General Motors, with a significant impact on the company's margins. This has led to a lowered price target by Mizuho analyst, indicating potential short-term negative impact on the stock price. However, the Buy rating reiterated by Benchmark analyst suggests a positive long-term outlook.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100