Shares of General Motors Co (NYSE:GM) tanked in early trading on Wednesday, despite the company surpassing revenue and earnings estimates.
The General Motors Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating and price target of $55.
The General Motors Thesis: The company reported revenues of $47.12 billion, down 2% year-on-year, but significantly higher than Street expectations of $45.84 billion, driven by "strong demand for its vehicles and stable vehicle pricing," Ives said in the note.
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General Motors announced earnings of $2.53 per share, topping consensus of $2.34 per share, despite "a $1.1 billion tariff impact," he added.
Although the tariff impact is expected to be higher in the back half of the year than it was in the first half, the company continues making "solid progress" with mitigating at least 30% of these costs "through manufacturing adjustments, targeted cost initiatives, and consistent pricing," the analyst stated.
Management reiterated its full-year top- and bottom-line guidance, as General Motors gears up to "ramp the deliveries of its new models while stabilizing the bottom-line through continued improvements in its business model to offset the tariff impact," he further wrote.
GM Price Action: Shares of General Motors had declined by 7.33% to $49.31 at the time of publication on Tuesday.
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