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8 Takeaways From General Motors' Sell-Side Analyst Dinner

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This week, Barclays analyst Brian Johnson attended a sell-side dinner hosted by General Motors Company (NYSE: GM) CFO Chuck Stevens. In a new note, Stevens broke down 8 takeaways from the dinner:

  • 1. Despite market fears that the U.S. auto market is peaking, GM management sees continued strength given a healthy U.S. economy.
  • 2. Management sees a number of catalysts ahead for GM, including a product refresh in passenger cars, cost savings and growth opportunities in its aftersales business, OnStar, Maven and Cadillac.
  • 3. GM may be able to up its cost-cutting target of $5.5 billion by 2018 given that the company is expecting $4 billion in cuts by the end of 2016.
  • 4. GM is aiming to reduce lease penetration from the high 20 percent range to the mid 20 percent range.

Related Link: Oppenheimer Sees No Q2 Surprises From Tesla

  • 5. GM is focusing its passenger car business on the global market and plans to shrink its U.S. passenger car footprint and free up 30 percent of its core capital for reinvestment and/or capital return.
  • 6. GM’s variable profit per unit was higher in the first half of 2016 than the first half of 2015.
  • 7. Management is confident that the company could dramatically reduce costs in the event of a downturn, including up to $4 billion in cost-cutting in a 20-25 percent industry decline.
  • 8. GM believes its international business, particularly in China, will be the main source of continued earnings growth in coming years.

Barclays maintains an Equal-Weight rating on GM and a $36 price target for the stock.

Latest Ratings for GM

DateFirmActionFromTo
Apr 2021Wells FargoInitiates Coverage OnOverweight
Feb 2021CitigroupMaintainsBuy
Feb 2021Morgan StanleyMaintainsOverweight

View More Analyst Ratings for GM
View the Latest Analyst Ratings

 

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