Morgan Stanley’s dull challenge to GM CEO Mary Barra: “How do GM expect to make money in EVS, so that players like Tesla can’t reveal?”
General Motors And if its legacy automotive industry peers want investors to rethink their growth outlook, they need bold strategies for the future, investment banks Piper Sandler I warned him on Tuesday. Otherwise, their collective things are tinkering with edges here with cost savings and inventory changes.
Morgan Stanley analyst Adam Jonas made a dull statement to CEO Mary Barra, comparing her company to Tesla and unfavourable in the Q&A section of the revenue call.
GM’s shares fell 8% after the sixth decline in second quarter adjusted net income A $1.1 billion hit From the Trump administration’s tariffs. Comes after the Detroit car maker StellantisJeep and RAM parents released pre-released results for the first six months that were revealed to have been shaken to a loss of 2.3 billion euros ($2.7 billion) from their previous year’s net profit.
The major uncertainty that clouds GM’s North American profit outlook continues to be the impact of import tariffs. As a result, Piper Sandler on Tuesday warned clients that GM could potentially approach adjusted revenue per share this year, rather than the $10 cap in its forecast range.
“But for us, these are not issues defining the paper. In our view, the more problematic call is that it is almost entirely focused on tactical or cyclical topics,” he wrote in his research notes.
The bank claims it is worth paying five GM revenues next year
The bank gave one example as an issue such as incentive expenditures, inventory levels, and cost offsets regarding tariffs. GM imports popular Chevrolet equinox and Cadillac Optiq EVs from Mexico. Both saw a surge Q2 Requests that could potentially reflect pull-forward effects as dealers stocked in stock 25% Automotive Sector Tariff When a hit and a customer bought the EV before the September 30 deadline for the end of federal EV credits that was cancelled by the Trump administration.
“In our view, if GM or other traditional car makers want to emerge from multi-year funk, then smart tactics are not needed,” Piper Sandler continued.
Otherwise, the bank will continue to show GM shares based on the same $48 price target, representing the forecast revenue five times for next year.
GM’s stock was first listed on the New York Stock Exchange in November 2010. At the time, the company boasted what was called the “Fortress Balance Sheet” with no legacy risk, including pensions and medical obligations for staff and retirees that helped them go bankrupt the previous year.
However, investors who buy at an IPO price of $33 are not rewarded compared to the broader stock market. The stock price averaged an annual combined return rate of 2.6% over the next 15 years, versus 11.8% on the S&P 500.
“How do GM expect to make money with EVs so that players like Tesla can’t reveal them?”
In comparison, Piper Sandler considers Tesla, the Magnificent 7 Stock Group’s more than $1 trillion megacup company, to be significantly valued at 140 times its 2026 profit. The main reason for its lofty multiple is Tesla’s efforts in the fields of artificial intelligence and humanoid robotics.
In a research note released this weekend, Piper Sandler advocated for further geographic expansion in the Austin area, served by Tesla’s newest. AI-equipped Robotaxi fleet (It is generally estimated that it still includes only a few dozen cars) could have been favorable enough to overturn negative revisions to forecast revenue. CEO Elon Musk’s company is due to report Quarterly revenue After the end of the market on Wednesday.
GM did not respond to a luck Requests for comments made outside of normal working hours.
However, automaker CEO Mary Bala faced scrutiny from analysts during a second quarter conference call.
“Elon appears to be withdrawing from the automotive industry, apparently pulling capital out of business, doubling AI, autonomy and Robotaxis,” Morgan Stanley analyst Adam Jonas said in an investor’s call Tuesday. “So, how do GM expect to make money with EVs so that players like Tesla can’t reveal?”
Barra responded that there is a “we’re looking” partnership in the field of automation, but on the subject, GM is primarily interested in improving the efficiency of automotive factories.
“Overall, we’re focusing on what drives manufacturing optimization,” replied GM CEO.