UBS sees an uncertain future ahead for General Motors as global trade uncertainty mounts. The bank downgraded the automaker to neutral from buy. Analyst Joseph Spak lowered his price target to $51 from $64, implying 11% upside. “Our estimates are reduced to consider the impact of tariffs on the cost structure as well as the impact to auto demand,” the analyst wrote. A 25% U.S. tariff on “all cars that are not made in the United States” took effect this month. Trade tensions between the U.S. and China have also increased. President Donald Trump hiked tariffs on Chinese imports to 125% on Wednesday, after China had announced an 84% duty on U.S. products. GM YTD mountain GM YTD chart “We estimate that if left unmitigated, the annual cost headwind could be ~$5bn. For now, we assume GM will look to offset ~50% of the cost via price,” Spak said. “If USMCA [United States-Mexico-Canada Agreement] parts exemption goes away, the cost to produce US vehicles would increase and also cause the need for pricing to offset to increase, likely resulting in reduced volumes.” General Motors is set to report its first-quarter results on April 29. Spak expects the company to beat analyst expectations for the previous quarter, but “would not be surprised to see guidance withdrawn.” Shares of General Motors have dropped 14% this year. They dropped more than 3% in the premarket after the downgrade. Spak also cut his price target for Tesla to $190 from $225 and reiterated his sell rating on the electric vehicle maker. “While lower estimates for 2025 are now more broadly expected, we believe the whole trajectory of earnings for TSLA remains too high and could face negative revisions post 1Q25 results,” the analyst said. “Further, we’d highlight some risk to Tesla Energy from the China tariffs.” Tesla stock is down 33% on the year, making a slight recovery in recent days but still wiping out most of its post-election gain. Spak’s updated price target is roughly 30% below where shares closed on Wednesday. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
