'Structural Uncertainty' Means Downgrade at Deutsche Bank for GM Stock (NYSE:GM)

Globe and Mail

15-04-2025

Normally, when an analyst takes aim at a stock and does not like its trajectory, that puts a damper on the stock's performance as a whole. But for legacy automaker General Motors (GM), a downgrade at Deutsche Bank did very little to turn GM on its ear. In fact, GM shares surged nearly 4% in Monday afternoon's trading despite the pan.
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Deutsche Bank, via analyst Edison Yu, pivoted his recommendation from Buy to Hold, and also cut the price target down substantially as well. The share target price slid from $58 per share to a new target of $43. That is down 1% against the Friday close, reports noted.
The biggest reason? 'Structural uncertainty,' reports noted, all stemming from tariffs. If the tariffs turn out to last for years, becoming 'truly permanent,' then GM will run into those structural challenges. Its responses feature two bits of bad news. If GM 'onshores,' bringing production back to the United States, that means higher capital expense (capex) and, of course, lower profit. Pivoting to robotics to save money will send it afoul of the United Auto Workers (UAW) and politicians as well. But incorporating foreign products in its supply chain will leave it a tariff target.
Big Cadillac, Heading for the Sunset
Meanwhile, if you were hoping to pick up a huge new Cadillac as a daily driver, your chances are in rapid decline. GM is phasing out the Cadillac XT6 later this year, reports note, as it moves to retool the Spring Hill, Tennessee plant which makes them. The XT6, as it turns out, was an under-performing vehicle. That made for an excellent opportunity for GM to pivot Spring Hill to electric vehicles.
Reports noted that the XT6—designed as Cadillac's entry in the 'upscale family hauler' business—never really caught on, with fewer than 20,000 units sold annually since 2019, on average. Some might think that five years is not exactly a lot of time for a car to catch on in the market—especially given how much of those five years were spent under pandemic restrictions—but GM was not taking chances. Taking over for the XT6 at Spring Hill, reports note, will be crossover electric vehicles the Vistiq and the Lyriq.
Is GM a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GM stock based on nine Buys, four Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 6.96% rally in its share price over the past year, the average GM price target of $58.10 per share implies 27.97% upside potential.
See more GM analyst ratings
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