GM Shares Are Oversold and Earnings Will Prove It, Analysts Say

DETROIT ( TheStreet) -- Perhaps GM ( GM) shares have been beaten up a little bit too much.

Shares have fallen 8% year to date for the automaker, which has suffered from recalls as well as revelations of a failed corporate culture adept at shirking responsibility for fatal product flaws. But now several analysts strongly recommended GM shares.

They were slightly less optimistic about Ford (F), which is up 16% year to date.

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On Tuesday, GM shares closed $37.76, up 33 cents, while Ford shares closed at $17.82, up 16%. Both companies will report earnings on Thursday.

Analysts surveyed by Thomson Reuters forecast second-quarter earnings of 58 cents a share for GM and 36 cents for Ford.

Citigroup analyst Itay Michaeli said he expects GM to beat estimates; he has a price target of $48. J.P. Morgan analyst Ryan Brinkman calls GM "our top overall pick." S&P Capital Markets analyst Efraim Levy has a strong buy.

As for Ford, Brinkman on Tuesday trimmed his second-quarter estimate to 34 cents a share, although he retained an overweight rating. Levy has a buy rating on Ford and an $18 price target. Michaeli said he is "not forecasting a second-quarter beat.

Ford stock "has performed well," Michaeli wrote in a report issued Monday. "The immediate reaction to the quarter could initially be modest. However, Q2 data points should support further second half share price momentum."

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