GM Stock Stalling After Barclays Downgrade – TheStreet.com
NEW YORK (TheStreet) — Shares of General Motors Co (GM – Get Report) were stalling, down 2.74% to $30.57 in early market trading Thursday, after analysts at Barclays downgraded the car maker to “equal weight” from “overweight” this morning.
The firm reduced its price target on shares of GM to $36 from $44, pointing to disappointing Chinese auto sales, and the slow recovery in Europe.
Barclays analysts said they see few near-term catalysts for GM given its larger exposure to China.
This morning, Barclays cut its rating on the U.S. autos and auto parts sector to “negative” from “neutral” citing risks in China.
Detroit, Mich.-based General Motors designs, build and sell cars, trucks and automobile parts globally.
Insight from TheStreet’s Research Team:
GM is a core holding of Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager & Jack Mohr, Director of Research – Action Alerts PLUS had to say about the stock:
General Motors (
GM:NYSE; $31.40; 1,100 shares; 1.34%; Sector: Consumer Discretionary): GM’s U.S. June sales declined by nearly 7%, year over year, worse than consensus expectations for a 0.5% y/y decline. The softer sales seem to be a result of an overemphasis on profitability per unit.
For example, while total sales decreased, this was due to a planned 49% y/y reduction in less profitable sales to rental car customers, who tend to buy in bulk and with fewer trim options.
We are concerned about the company’s struggling U.S. business, especially in concert with the weakening economy in China and foreign exchange nightmare in Latin America. We are sellers on any sharp strength.
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Separately, TheStreet Ratings team rates GENERAL MOTORS CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
“We rate GENERAL MOTORS CO (GM) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company’s strengths can be seen in multiple areas, such as its increase in net income, impressive record of earnings per share growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.”
You can view the full analysis from the report here: GM Ratings Report