GM's Value Trap Image Is 'Tough To Shed,' But Barclays Is Still Overweight

In a report published Tuesday, Barclays analyst Brian A. Johnson maintained an Overweight rating and $44 price target on General Motors Company (NYSE: GM). Although the analyst believes that the stock offers a unique opportunity, the "value-trap image" that has plagued the stock for sometime appears to be difficult to shed."It is increasingly clear to us that there is likely little near-term that can help to shed the value trap image, and thus drive upside for the stock," Johnson explained.While the analyst believes that the company could see upside, driven by strong monthly sales data for the U.S., especially in the event of a favorable large pickup environment, there is also likely to be limited downside, given the cheap stock valuation, attractive dividend and the ongoing share buybacks."However, we think GM is a "show me" story, and real upside for the stock won't be achieved until GM strings together several quality earnings beats, proving that progress is being made on self-help initiatives. Similarly, the product debate remains a "show me" story - investors are skeptical that GM's forthcoming product upgrades will lead to lasting improvements in variable profit per unit," Johnson added.On the other hand, while profits in North America are expected to remain stable, the analyst believes that there could be negative earnings revisions in the General Motors' China operations, driven by intense pricing pressures and weak volumes.