One auto stock is quietly breaking out as Tesla struggles. Citi sees a double from here

Analysts think General Motors will emerge as a bright spot in an automobile industry challenged by a weakening electric vehicle market. Slowing sales and sluggish adoption rates have driven down shares of EV leader Tesla by 31% this year, raising concerns over whether the Elon Musk-led company build on its EV market share globally while also delivering on full self driving initiatives. But Wall Street firms including Citigroup and Bank of America now think General Motors can strengthen its position in EVs. GM TSLA YTD mountain General Motors stock has outpaced Tesla in 2024. Already, shares of the legacy automaker have climbed 26 % in 2024, far outperforming the 9.5% gain in the S & P 500. Last month, GM topped Wall Street estimates for both sales and earnings in the first-quarter and raised its full-year outlook . “The next few quarters are key for EV execution, but we still like the risk/reward setup since a successful outcome (even at an exit rate) would further strengthen the case that GM is meaningfully under-earning (at a ~5x P/E) while likely allowing GM to capture a double-digit U.S. EV [market] share,” Citi analyst Itay Michaeli wrote in a late April report. The bank has a buy rating on General Motors with a $96 per share price target, implying 113% upside from Monday’s $45.17 close. Nor is Citi alone in its bullish assessment of GM. Bank of America analyst John Murphy thinks GM’s increased forward guidance after its first-quarter results will prove too conservative. Murphy also reiterated a buy rating on GM largely due to BofA’s “view that the company remains a leader among the industry in its Core to Future transition.” “More specifically, GM’s ongoing execution and strength in its Core business continues to enable the company to make investments in EVs, [autonomous vehicles] and other areas to future-proof the business, while continuing to return value to shareholders,” he added. Murphy’s $75 per share price target implies 66% upside over the next 12 months. JPMorgan analyst Ryan Brinkman reiterated an overweight rating on GM last month, alongside a $58 per share price target, suggesting 28% upside in the next year.