GM stock gets rating downgrade to sell on ‘growing risk’ of UAW strike

CFRA analyst Garrett Nelson on Friday cut his rating on General Motors Co.’s stock
GM,
-0.26%
to “strong sell,” from the equivalent of neutral, on the increased risk of a United Auto Workers strike. Nelson also cut his 12-month price target on GM stock to $28, from $40, representing a 24% downside over Friday prices. “We move to strong sell on the growing risk of a UAW strike, given reports that the company and union remain extremely far apart in labor negotiations” ahead of the Sept. 14 contract expiration, Nelson said in a note Friday. “GM has a much greater earnings risk in the event of a strike than either [Ford Motor Co.
F,
-1.36%
] or [Stellantis NV
STLA,
+0.28%
],” he said. CFRA is also “cautious on the near-term earnings drag from GM’s EV transition as well as ultimate demand for its new models at a time of growing EV market oversaturation,” the analyst. Shares of GM have gained 10% in the year to date, which compares with an advance of about 19% for the S&P 500 index.
SPX,
+0.07%