DETROIT – General Motors Co. is facing higher costs and lower demand that may eat into the U.S. automobile giant’s profits under the tariff program imposed by President Donald Trump, UBS analysts said Thursday.
UBS downgraded GM’s stock to neutral from buy and slashed its price target on the stock to $51 from $64. Analysts also cut their first-quarter earnings estimate for GM to $2.79 a share from $2.89.
The auto giant reports its first-quarter results on April 29. The FactSet consensus estimate for GM’s first-quarter profit is $2.63 a share.
“Our estimates are reduced to consider the impact of tariffs on the cost structure as well as the impact to auto demand,” UBS analyst Joseph Spak said in a research note.
Based on tariffs already imposed, the cost of GM cars made in Mexico or Canada and sold in the U.S. will go up by about $4,300 each, UBS analysts said. For GM cars made in Korea or China and sold in the U.S., GM’s costs will rise by about $6,250 per vehicle, analysts said.
“For now, we assume GM will look to offset about 50% of the cost via price,” Spak said. “The price increase does not need to be on the vehicle facing the direct tariff impact as GM can use the portfolio to help mitigate.”
UBS did not project any meaningful cost changes to the vehicles that GM produces and sells domestically.
It’s likely General Motors may withdraw its financial guidance for 2025 “given the ongoing macro and tariff-related uncertainty,” Spak said.
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