What Happened?
Shares of automotive manufacturer General Motors (NYSE:GM) fell 5.9% in the afternoon session after UBS downgraded its rating from Buy to Neutral, signaling a more cautious outlook on the stock's near-term potential. The firm also lowered its price target from $64 to $51, citing reduced earnings expectations.
The shares closed the day at $43.72, down 4.3% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy General Motors? Access our full analysis report here, it’s free.
What The Market Is Telling Us
General Motors’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 7.7% on the news that President Trump announced 25% tariffs on all cars imported into the United States. Stocks of automakers that don't source materials and make all vehicles in the United States appeared to have been hit the hardest. The prospect of higher tariffs raised concerns about reduced profit margins, disrupted operations, and a potential slowdown in future growth. For these automakers, the new policy also introduced fresh uncertainty around competitiveness in the U.S. market, which could ultimately weigh on earnings.
General Motors is down 14.8% since the beginning of the year, and at $43.78 per share, it is trading 27.3% below its 52-week high of $60.20 from November 2024. Investors who bought $1,000 worth of General Motors’s shares 5 years ago would now be looking at an investment worth $1,903.
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