Jefferies Starts General Motors (GM) at Hold, Is This A New GM?
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Price: $32.87 +0.06%
Rating Summary:
20 Buy, 4 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
20 Buy, 4 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade GM Now!
Jefferies initiates coverage on shares of General Motors (NYSE: GM) with a Hold rating and $34 price target.
The firm comments that its good to see GM making money now, but that they believe the T-900 remains the company's biggest earnings lever.
The auto industry experienced peak-cycle type margins in 2010 despite cyclically low sales volumes. Jefferies believes that sales growth is going to decrease substantially from its 51% increase in 2010 to a 11% increase in 2011 and 1% in 2012. More downside could even come in the future is oil prices continue to rise.
Jefferies feels that GM has potential for enormous industry volume growth in China, but remains skeptic on the industries pricing a few years out into potentially overbuilt industry capacity.
The firm reports that, "We respectfully believe GM needs to earn back investors’ trust. Recent focus on GM's increase in incentive spending underscores this point. We wholeheartedly believe GM is under no pressure to discount at a 13 million SAAR after cutting capacity 35%-40%. However, skeptics seemingly were quick to brand GM a "yo-yo dieter" falling back into bad habits."
For more ratings news on General Motors click here and for the rating history of General Motors click here.
Shares of General Motors closed at $31.44 yesterday, with a 52 week range of $30.95-$39.48.
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The firm comments that its good to see GM making money now, but that they believe the T-900 remains the company's biggest earnings lever.
The auto industry experienced peak-cycle type margins in 2010 despite cyclically low sales volumes. Jefferies believes that sales growth is going to decrease substantially from its 51% increase in 2010 to a 11% increase in 2011 and 1% in 2012. More downside could even come in the future is oil prices continue to rise.
Jefferies feels that GM has potential for enormous industry volume growth in China, but remains skeptic on the industries pricing a few years out into potentially overbuilt industry capacity.
The firm reports that, "We respectfully believe GM needs to earn back investors’ trust. Recent focus on GM's increase in incentive spending underscores this point. We wholeheartedly believe GM is under no pressure to discount at a 13 million SAAR after cutting capacity 35%-40%. However, skeptics seemingly were quick to brand GM a "yo-yo dieter" falling back into bad habits."
For more ratings news on General Motors click here and for the rating history of General Motors click here.
Shares of General Motors closed at $31.44 yesterday, with a 52 week range of $30.95-$39.48.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
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