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General Motors Stock Edges Up; Analysts’ Support Guarded

General Motors receives guarded support from analysts following its third-quarter earnings beat.

Analysts gave guarded support to General Motors  (GM) - Get General Motors Company (GM) Report after the automaker beat Wall Street's third-quarter earnings expectations.

Shares of the Detroit company at last check were up 0.5% to $54.52.

General Motors on Wednesday posted better-than-expected third-quarter earnings and indicated that full-year profit would likely hit the high end of its forecast.

Credit Suisse analyst Dan Levy, who affirmed his outperform rating and $75 price target, said that "while it wasn’t the beat and raise we hoped for, and while we appreciate some concerns by investors on the question of peak earnings, we nevertheless believe the bull investment thesis is very much intact."

The analyst said that "not only does it benefit from a favorable cycle, but as we noted post the investor day earlier this month, we believe GM merits multiple expansion as it proves itself a beneficiary in an Auto 2.0 world."

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Wedbush analyst Daniel Ives maintained his outperform rating and $85 price target, saying, "GM continues to navigate near term supply/chip issues as seen in 3Q with the company's growth and transformation all focused on the EV revolution."

"Our bullish thesis is predicated on the Detroit stalwart's ability to convert 20% of its installed base by 2025 and 50%-plus to EVs by 2030, which will result in a metamorphosis of its valuation in the eyes of the Street," he said. 

In the near term, Ives said, "the lingering Bolt battery issues, chip shortage, and lack of production/supply will be headwinds for GM as well as other auto players heading into early 2022."

That said, he added, "we view this transition period as noisy but see the forest though the trees."

Jefferies analyst Philippe Houchois, who has a hold rating and $53 price target on the stock, said "GM demonstrated again the resilience of its cost base."

Houchois said that free cash flow was much worse, "but all on working capital [includes] unfinished vehicles that will likely reverse in part in Q4."