Citigroup believes that General Motors ' fourth-quarter electric vehicle cost realignment should support profit margins and earnings growth in the years ahead. The bank maintained its buy rating on the automobile manufacturer and raised its 12-month price target by 12%, to $98 from $86. Shares of General Motors have soared 66% over the past 12 months. Citi analyst Michael Ward's new estimated share value is approximately 18% above where GM closed Friday. GM 1Y mountain GM 1Y chart Ward called General Motors' $6 billion, fourth-quarter charge to realign costs and capacity for battery electric vehicles with current demand expectations a one-time charge that will bring lasting tailwinds for the stock. The bulk of the charge, he noted, will go to settling contract cancellation fees and commercial settlements with suppliers. "On a positive note, the charge will result in lower operating expenses, a reduction in supplier reimbursements for lower-than-expected volumes, and the discontinuation of Brightdrop provides another tailwind," he wrote. "The accounting benefits in 2026, in our view, could help to return GM's North American margin performance back to the 8-10% targeted range." Reflecting the benefit from the accounting treatment stemming from the charge, Ward increased his 2026 earnings estimate to $12.25 from $11.50 and his 2027 earnings estimate to $13.15 from $12.50. Additional highlights from GM's current quarter include better-than-expected production and pricing remaining above market. Citi's price target assumes the stock eventually reflects better GM results in 2026 through 2027. "Market share gains, an improved product alignment with market share trends, positive pricing, lower costs, and a more decisive culture, in our view, justifies a premium multiple relative to pre-Covid," he wrote.
