It's time to leave shares of General Motors in the rearview mirror as tariffs weigh on the auto sector, according to Bernstein. The investment firm downgraded the automaker to underperform from market perform. Analyst Daniel Roeska also cut his price target to $35 from $50. The new forecast points to a 21% decline from Friday's close. Roeska pointed to President Donald Trump's new 25% tariffs on "all cars that are not made in the United States" as a driver for his downgrade. The analyst said these duties, alongside waning consumer sentiment, will pressure General Motors shares going forward. "Now, with greater clarity, the outlook for GM is clearly unfavorable," Roeska wrote. "Our revised numbers reflect the impact of tariffs, softening consumer sentiment, and the realization that GM's peak in this cycle may be behind it." He added that his forecast uses the most lenient tariff assumptions, i.e., assuming "U.S. content" interpretation applies only to imports outside of the United States-Mexico-Canada Agreement. Under a strict "U.S. content" interpretation, the tariff impact could double. GM 1Y mountain GM 1Y chart Roeska also anticipates that these tariffs will pressure earnings, likely leading to a pause in stock buybacks and further squeezing shares. "With tariffs, we anticipate GM will lower guidance and try to conserve cash. We expect earnings to decline through the next quarters until Q2 2026, when mitigation efforts and improving consumer sentiment may help GM and the sector to start recovering," he noted. GM shares slid nearly 4% in the premarket Monday. Year to date, they are down 17%. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today's dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles and Dan Ives, with a special edition of Pro Talks with Tom Lee. You'll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
