Analyst Expects Positive Q2 From GM Despite Recall Concerns
In a research report released Tuesday, JPMorgan analyst Ryan Brinkman shared positive expectations for automaker General Motors (NYSE: GM) ahead of the company's second-quarter earnings report, expected in late July.
Brinkman highlighted news out of GM Monday the automaker will do another 3.6 million in recalls, a majority of which he called “key recalls.” Amid the clear headline risk, Brinkman noted recall costs per vehicle has declined drastically since 1Q recalls
The JPMorgan analyst confirmed General Motor's most recent recalls has been an act of management to follow up with highly active safety precautions, that will continue by the end of the second quarter. The company's intention is to continue its product safety review as a hedge to avoid any further recall uncertainty and following second-quarter reduced recalls to a much slower pace.
Brinkman left his 2015 EPS estimate of $4.60 and price target of $50 a share unchanged, but adjusts its earning estimates for General Motors second quarter, decreasing the EPS estimate from $0.84 to $0.72 based on incremental recall expense of $300 million for the second quarter.
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|Aug 2015||Piper Jaffray||Maintains||Overweight|
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