GM Stock Gets New Buy Rating Ahead of Earnings. Uncertainty Is an Opportunity.

Coming into Monday trading, GM stock was down about 1% since the Nov. 5 presidential election. President Trump’s tariff policies have created a lot of uncertainty for auto makers, including GM. (Dreamstime)

General Motors stock rose early Monday, but couldn’t hold gains, after a bold call from a Wall Street analyst.

Benchmark analyst Mickey Legg initiated coverage of GM stock with a Buy rating and $65 price target. The initiation comes just before GM is scheduled to report quarterly results on Tuesday morning.

Legg didn’t want to wait. “GM presents a compelling opportunity for investors seeking exposure to a durable, cash-generative U.S. industrial franchise with underappreciated upside potential,” he wrote in a Monday report. “Despite recent market volatility related to tariffs and geopolitical uncertainty, GM’s core business remains resilient, supported by improving fundamentals, disciplined capital allocation, and strategic positioning across both internal combustion engine (ICE) and electric vehicle (EV) platforms.”

GM has produced more consistent profits than its peers and returned more to shareholders, buying back more than $20 billion worth of stock in recent years.

Shares traded as high as $54.30, but closed down one cent at $53.21 on Monday, while the S&P 500 gained 0.1% and the Dow Jones Industrial Average fell less than 0.1%.

New Buy ratings can help any stock. GM shares might have reacted more positively because investors are simply waiting for Tuesday’s earnings report. For the quarter, Wall Street projects an operating profit of $2.8 billion, down from $3.5 billion in the first quarter of 2025. GM reported an operating profit of $4.4 billion in the second quarter of 2024.

Earnings are expected to fall as tariff costs start to bite. President Donald Trump imposed 25% imports on all new vehicle imports. In 2024, GM imported about 45% of the cars it sold in the U.S., mainly from Mexico and South Korea. In May, GM estimated that the total 2025 tariff impacts would land between $4 billion and $5 billion.

Despite the increased tariff-related costs, GM is expected to earn more than $9 a share in 2025, according to FactSet, leaving shares trading for less than 6 times estimated 2025 earnings. GM stock has traded at about 4 times to 6.5 times estimated earnings over the past few years.

Legg’s target values GM stock at about 6 times his estimated 2025 earnings. He sees 2025 earnings per share higher than the Wall Street average at about $10.50.

With the new Buy rating, 52% of analysts covering GM stock have Buy ratings, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for GM shares is about $56.

Coming into Monday trading, GM stock was down about 1% this year. The stock has been stuck amid tariff uncertainty. Benchmark’s Legg thinks that is an opportunity.

Write to Al Root at allen.root@dowjones.com