JPMorgan has revised its stock price target for General Motors (GM), cutting it from $64 to $53 amid concerns over looming U.S. tariffs, in particular new tariffs on imports from Mexico and Canada. Although the firm maintains its “Overweight” rating, indicating continued confidence in GM’s long-term value, it cautions that the automaker could see its 2025 profits wiped out if new trade measures are enacted. JPMorgan estimates GM could face upwards of $14 billion in additional costs as a result of the new tariffs recently announced by President Trump.
As reported by Investing.com, approximately $10 billion of the estimated $14 billion in additional costs would be applied to fully assembled vehicles, plus another $4 billion on imported components destined for U.S. factories. Notably, this figure directly aligns with GM’s projected global earnings before interest and taxes (EBIT), estimated between $12.5 billion and $14.5 billion for 2025.
Meanwhile, analysts estimate that Ford’s tax bill may seen an increase of about $6 billion, or roughly 75 percent of its forecasted 2025 earnings, due to a lower volume of imports from Mexico and Canada as compared to General Motors.
Despite these pressures, JPMorgan’s analysis paints an overall solid financial position for General Motors. The automaker recorded $187.44 billion in revenue over the past year, the majority of which came from U.S. vehicle sales. Additionally, its free cash flow yield sits at a strong 18 percent, and its current price-to-earnings ratio of 7.86 suggests that the stock may still be undervalued.
Meanwhile, other Wall Street firms are adopting a more cautious stance. Piper Sandler raised its General Motors price target slightly to $48, but kept a Neutral rating, noting a cycle of post-earnings decline in the auto industry.
Just yesterday, President Trump announced a 25-percent tariff on all vehicles manufactured outside the U.S., set to take effect next week on April 2nd, 2025. The new tax is intended to drive domestic manufacturing, but experts warn that the immediate result is likely a massive hike in vehicle prices for consumers.
Nevertheless, GM CFO Paul Jacobson said in February that GM has “a good playbook” when it comes to navigating Trump’s new tariffs.
Comments
Building vehicles in China, Mexico, & South Korea. GM asked for this along with the UAW which helped sent work overseas with their demands. “Imperfect Storm”and yes, I have worked at a radical UAW plant & lost a great job at a non-union plant when the furniture industry went to China about 20 years ago. Our trade policies have sold out the American workers, Union and non-union.
This is honest to god the dumbest take I’ve ever read. GM’s most profitable vehicles are built in the United States, and even though they are, they’re still subject to these inflationary tariffs. Y’all are trying so hard to justify these idiotic, disastrous economic policies from this dementia-ridden burnt dumbass; it’s hilarious.
When you have mediocre leadership you get mediocre stock prices.
Trump’s leadership is far worse than mediocre. Trump can only aspire to someday reach the level of mediocrity.