UBS Cuts Price Target on General Motors (GM) to $48 Following Investor Day

UBS maintained a Buy rating on General Motors (NYSE: GM), and cut the price target to $48.00 (from $49.00), following an investor day. GM reiterated its 10% N American margin & European profit targets. This supports their 2016 EPS target of $5.00-$5.50, the mid-point is above consensus of $5.11.

Analyst Colin Langan commented, "GM shares traded up only ~2% despite providing a solid financial outlook and highlighting opportunities for sales & margin growth. As we expected, GM reiterated its 10% N American margin & European profit targets. This supports their 2016 EPS target of $5.00-$5.50, the mid-point is above consensus of $5.11. GM also guided to double digit EPS growth over the next few years. More importantly, GM targeted FCF of $6-7bn/year in 2016-17 and $9-10bn/year post 2020, implying significant cash return to shareholders in the future. This would imply GM could buy back its market cap in less than 7 yrs. Today's Investor Day increases our confidence in GM's long-term growth, and we continue to see the valuation at <2.5x our 2016E EBITDA as compelling."

For an analyst ratings summary and ratings history on General Motors click here. For more ratings news on General Motors click here.

Shares of General Motors closed at $30.67 yesterday.

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