General Motors (GM) is an automobile manufacturer with headquarters in Detroit. The company is making every effort to expand its foothold in the electric vehicle (EV) market.
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General Motors recently announced its fourth-quarter results. Overall revenues fell 10.5% to $33.58 billion on a year-over-year basis. Also, adjusted profits per share decreased 30% year-over-year to $1.35 per share.
Management anticipates adjusted profits of $6.25 to $7.25 per share for the full year of 2022.
Apart from the recent results, let’s look at the risk factors for General Motors using the new Tipranks’ Risk Factors tool.
Risk Factors
According to the new Tipranks’ tool, General Motors’ main risk category is Tech & Innovation, which accounts for 6 of the total 26 risks identified. The next two major General Motors risks come under the Legal & Regulatory and Production categories.
The organization has added one new risk under the Legal & Regulatory category.
General Motors cautions investors that the firm is subject to climate change-related risks, which include a slew of laws and regulations governing greenhouse gas (GHG) emissions and fuel efficiency standards. The environmental regulations may force General Motors to adjust its production techniques and possibly its product lineup, which might lead to higher expenses. In addition, the new legislation may raise the risk of legal action and government investigations. Also, consumer preferences are shifting, potentially resulting in lower demand for GM’s internal combustion engine (ICE) cars, impacting sales and profitability.
Furthermore, the company warned investors that transitioning to electric vehicles (EVs) entails additional risks, such as higher costs connected with EV technology. Finally, any weather changes, such as storms or droughts, might have a major negative influence on the company’s production and logistics, putting its financial state in jeopardy.
Wall Street’s Take
Following the Q4 earnings release, Joseph Spak of RBC Capital maintained a Buy rating on the stock and increased the price target to $85 from $74. This implies about 60% upside potential to current levels.
Turning to Wall Street, the stock has a Strong Buy consensus rating based on 11 Buys and 3 Holds. The average GM price target of $77.15 implies 45.3% upside potential to current levels.
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