General Motors and its legacy auto industry peers need a bold strategy for the future if they ever want investors to rethink their growth prospects, investment bank Piper Sandler warned on Tuesday. Otherwise their collective tinkering around on the edges with cost cuts here and inventory changes there amount to little more than rearranging the deck chairs on the Titanic, the bank implied.
And Morgan Stanley analyst Adam Jonas had a blunt statement for CEO Mary Barra, comparing her company unfavorably with Tesla in the Q&A section of the earnings call.
Shares in GM tumbled 8% after second-quarter adjusted net profit fell by a sixth, owing in part to a $1.1 billion hit from the Trump administration’s tariffs. It comes after fellow Detroit carmaker Stellantis, the parent of Jeep and Ram, preannounced results for the first six months that revealed it swung to a €2.3 billion ($2.7 billion) loss from a net profit of €5.6 billion the prior year.
A major uncertainty clouding the outlook for GM’s North American profits moving forward remains the impact of import duties. As a result, on Tuesday, Piper Sandler warned clients it’s possible that GM could end up closer to the $8.25 in adjusted earnings per share for this year rather than the upper bound of $10 in its forecast range.
