UBS Lowers GM Price Target to $109

UBS analyst Joseph Spak lowered the price target on General Motors (NYSE: GM) to $109 (from $112) while maintaining a Buy rating.

“The main factor is the intensifying cost pressure which GM sized as $1-$1.5bn incremental (if annualizing current levels) from July levels which would result in a $2bn y/y headwind into 2027.

If we look at pre-print consensus EBIT of $16.2bn and assume that an incremental ~$1.25bn cost headwind, that would take 2027 EBIT to ~$15bn which is where we expect consensus to settle.

UBS had already included a $2bn y/y commodity headwind, but we now tweak our 2027 EBIT forecast to $15bn.

We believe GM will still attempt to grow EBIT next year, but increasingly (unless commodities moderate) this is dependent on finding additional fixed cost savings.

That said, we believe $10bn in share repurchases are possible next year leading to EPS of ~$15.20. At ~5x 2027 P/E and with the strong effort to de-risk 2027, we are positive at current levels.

Our PT goes to $109 but we remain Buy rated seeing a best in class OEM executor with solid FCF enabling higher y/y buybacks in 2027 (new $20bn authorization is ~28% of current market cap) and growing diversified, higher margin earnings streams from areas such as GM Digital and defense.”

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