Investing.com -- Barclays downgraded General Motors (NYSE:GM) to "Equal Weight" from "Overweight" and slashed its price target to $40 from $70, marking fourth analyst downgrade on stock this month, following cuts from Deutsche Bank (ETR:DBKGn), UBS and Bernstein as Wall Street grows increasingly cautious on the automaker's near-term outlook.
Barclays (LON:BARC) downgrade was driven by mounting risks from proposed U.S. import tariffs and their potential impact on GM’s earnings and EV strategy.
Barclays cut its 2025 EBIT estimate for GM to $8.6 billion from $14.4 billion, warning that tariffs could significantly pressure margins, particularly given GM’s manufacturing footprint.
Nearly half of the vehicles GM sells in the U.S. are assembled outside the country, with heavy reliance on Mexico and Canada.
GM lacks sufficient U.S. capacity for its most affordable vehicles, which are most exposed under a tariff scenario, Barclays analysts wrote.
The firm expects a production shortfall of about 250,000 light-duty trucks next year due to cross-border assembly constraints, despite GM’s efforts to increase output at its Fort Wayne, Indiana plant.
EV targets are also at risk. Barclays said GM is likely to miss its goal of 300,000 EV wholesales this year as key models like the Blazer and Equinox are made in Mexico.
The bank now expects GM’s North American EV volumes to decline slightly in 2025.
Barclays modestly favours Ford over GM due to Ford's higher mix of U.S.-assembled vehicles, though it also noted Ford will face similar tariff-related pressures.
GM shares have come under pressure in recent weeks as analysts reassess the company’s earnings potential amid macro and regulatory uncertainty.
Barclays now values GM at 5.7 times its 2025 estimated EPS of $7.04, down from a prior estimate of $12.30.
