Deutsche Bank: General Motors Executing Well But Macro Headwinds Still A Concern

General Motors Company GM earned $0.97 per share during its third quarter with a healthy EBIT of $2.058 billion. Despite the fact that the company posted respectable results across most geographic regions, some analysts are taking a cautious approach.

On Friday, Rod Lache of Deutsche Bank maintained a Hold rating on General Motors with a price target lowered to $39 from a previous $41.

"The issue for the stock, however, is that the macro data points are not especially supportive," Lache wrote in his note. The analyst currently sees a moderation in prices within the North American new- and used-vehicle pricing. The concern was underscored by the fact that General Motors posted a $200 million year-over-year decline in contribution margins in the quarter.

Lache is also concerned over General Motors operations in China. The analyst believes that slowing industry growth and macro headwinds in the country could "derail" the company's expectation in the country.

Shares of General Motors could see upside, according to Lache, when the company improves its cash flow inflection. General Motors current cash flow is "masked" by $1.7 billion of cash recall costs, $1.0 billion of cash restricting and $300 million on litigation.

With additional expenses expected in 2015, the analyst sees General Motors cash flow freeing up and generating $5 billion to $7 billion only in 2016.

"That is quite far for an Auto Investor… especially considering the macroeconomic, regulatory, and technology risks that the Industry now faces," Lache concludes.