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GM should be bought, not sold, on truck production cut, says BofA
The Fly

GM should be bought, not sold, on truck production cut, says BofA

BofA analyst John Murphy notes that General Motors announced that it plans to idle production at its Fort Wayne, Indiana plant that makes full-size trucks, including the Chevrolet Silverado and GMC Sierra, for two weeks beginning at the end of March and that the stock declined 4% on this news given the concerns of weakening demand. While stating that the firm understands these concerns, BofA is "encouraged" by the news as it supports the firm’s thesis that automakers will be more disciplined on production as they focus more on pricing and profits. In isolation, the idling of production for two weeks could have a 10c-20c impact on EPS, which compares to the firm’s full year 2023 EPS estimate of $6.10. BofA maintains a Buy rating on GM with a $70 price target, citing a view that the company "remains a leader in the industry with its Core to Future transition."

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