Citi Reiterates Buy Following General Motors’ Q3 Sales Release

By Michael Elkins

Citi Research reiterated a Buy rating and $78.00 price target on General Motors (NYSE:) following the automaker’s Q3 sales and inventory numbers. Citi believes that the inventory number is most incremental as it provides some color around 3Q3 GMNA wholesale volume estimates.

Citi wrote in a note that, “Overall, we view GM’s QoQ inventory growth (from ~248k to ~359k) as directionally encouraging. While it’s hard to precisely relate this to our 793k Q3 GMNA wholesale volume estimate (since there are other factors like imports/exports & rental volume that can affect wholesales), we do think it implies less risk of a major Q3 volume shortfall tied to unfinished vehicles.”

Citi should be able to gain additional detail in the coming days around segment inventory and pricing/incentives, but was generally encouraged by the tone in GM’s release, including commentary on inventory turns.

Lastly, Citi notes that GM’s dealer inventory remains perhaps 20-40% below ideal levels, by their estimation.

Shares of GM are up 2.53% in pre-market trading on Tuesday.

[ad_2]

Source link