General Motors (GM) is taking the right approach to navigate supply chain choppiness and macro headwinds with a focus on driving cash flow from its internal combustion engine business in tandem with relatively better execution of its electric vehicle strategy, Wedbush said in a Thursday note.
The brokerage said it expects the company to move towards a major growth trajectory with ICE models beginning to make up a bigger part of its business.
The company made a wise decision to lower its EV capacity, reducing its footprint by 30% last quarter, as it navigates a domestic EV demand slump. It is transitioning from EV to bolster its ICE portfolio for margin gains in 2026, according to the note.
General Motors directed many suppliers to consolidate their supply chains away from China by 2027 to eliminate the tariff impact on operations. It plans to get most of its parts from North American factories for vehicles, analysts wrote.
The company's $4 billion investment in US facilities is another strategy to offset tariff impacts as it plans to produce two million more vehicles domestically, according to Wedbush.
The brokerage said it reiterated its outperform rating on the stock and raised its price target to $95 per share from $75.
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