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General Motors (NYSE: GM) has been downgraded by Bernstein from “Market Perform” to “Underperform” as concerns rise over the impact of new tariffs on the company’s financial outlook. The change comes with a significant reduction in the stock’s price target, reflecting anticipated challenges in the automotive sector.
Bernstein Analyst Downgrade Outlook on General Motors Amid Trade War
Bernstein analysts have revised their outlook on General Motors, downgrading the stock from “Market Perform” to “Underperform.” This decision is largely driven by the anticipated negative effects of newly implemented tariffs on vehicles and parts, which are expected to impact GM’s financial performance significantly.
The price target for GM’s stock has been adjusted from $50 to $35, indicating a cautious approach towards the company’s future valuation. The forecast suggests a decline of over 20% in GM’s free cash flow and a projected drop of more than 50% in adjusted earnings per share by 2026.
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GM Reported a Robust Performance in Q1 2025
Despite the challenges posed by tariffs, General Motors reported a robust performance in the first quarter of 2025, with a notable 16.7% increase in U.S. deliveries. In response to the evolving market conditions, GM is ramping up production of light-duty trucks in Indiana, a move that is expected to add between 225 and 250 jobs.
Additionally, the company is leveraging its joint venture with LG Energy Solution to strengthen its U.S. operations by selling $2 billion in assets to its American unit. GM is also actively lobbying for tariff exclusions on certain vehicle parts to mitigate the financial impact of the new tariffs.
GM Stock brief
General Motors’ stock has experienced fluctuations in recent weeks, reflecting the market’s reaction to Bernstein’s downgrade and the broader economic conditions. The stock closed at $44.18 on April 4, 2025, after opening at $44.46 and reaching a low of $42.73 during the day. The latest premarket price was recorded at $42.76.
Over the past month, GM’s stock has seen a decline from a high of $52.59 on March 25 to its current levels, indicating investor caution. Despite these fluctuations, analysts maintain a “Buy” recommendation with a target mean price of $61.10, suggesting potential for recovery as the company navigates the challenging landscape.
Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
