UBS Reiterates Buy on General Motors (GM) Following 2Q Earnings Beat
UBS reiterated a Buy rating and $41.00 price target on General Motors (NYSE: GM) following the company's 2Q earnings report.
Analyst Colin Langan commented, "Similar to Q1, GM traded up just 2% (vs. industry ~flat) after posting another strong earnings beat. The adj. EBIT beat was almost all attributed to N America driven by pricing ($0.9bn y/y) and volume (~$0.4b net of negative rental mix). GM was cautious on GMIO ex China and not surprisingly, EU, post the UK referendum. However, GM was still confident enough in N America to raise FY guidance from $5.25-$5.75 to $5.75-$6.00. Lower taxes also helped as tax guidance was adjusted down from mid-20% to low-to-mid 20%. We continue to believe global markets are more stable than investors expect, and with cost cutting and buybacks ($5.2bn remaining through 2017) we see ~9% EPS growth into 2017."
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Shares of General Motors closed at $32.03 yesterday.