Why this analyst stepped back from the stock

00:00 Speaker A

I got to ask you a question about GM though too, because it reports uh tomorrow morning. There you have a hold equivalent rating. Um, and you know, it feels like both Ford and GM have really been um struggling to to just correct correct their trajectories right now. So what does GM’s need to do? How do they need to deliver?

00:27 Speaker B

Well, Tesla, I mean, uh sorry, GM has had a great run. You look back, they’ve beat on the bottom line for 13 straight quarters. Uh the stock was the best performing auto manufacturer last year. Uh GM shares were up 54% and compare that to Tesla, which Tesla shares were up only 11% last year.

00:54 Speaker B

So it’s had a great run. We’ve had this was one of our top picks in 2025 and we just went to a hold on valuation um in mid- December and and um, you know, so many things have gone right for GM. They’ve grown their market share in the US significantly over the last three to four years.

01:19 Speaker B

Um but really it’s the it’s their large EV exposure which gives us some pause here and uh was really the reason why we head to the sideline. They’ve become the second largest um company uh seller of EVs in the United States in recent years. And we’ve seen where they’ve already taken some writedowns related to their significant EV assets and investments that they’ve made.

01:50 Speaker B

And while EVs have been a major growth driver uh for the company in in recent years. We think there’s just going to be a reversal of that where they’re actually going to lose some market share this year. um, you know, due to the EV tax credit expiring. So, uh we’re a little more cautious and again, it’s it, you know, it was a risk reward call. The stock had had a big run up and we just no longer saw a uh favorable risk reward, a risk reward that really appears more balanced here in our view.