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Is It As Good As It's Going Get This Year For U.S. Auto Sales?

Is It As Good As It's Going Get This Year For U.S. Auto Sales? - General Motors Company NYSE:GM, Ford Motor Company NYSE:F

Last week, General Motors Company GM 0.31% reported its second quarter results, which included GAAP net income of $2.9 billion or $1.81 per diluted share, up from $1.1 billion or $0.67 per share in the same quarter last year. Excluding special items (mostly legal expenses), the company saw EPS of $1.86 – well above the Street’s consensus of $1.50-$1.52.

Following such solid figures, analysts at Argus reiterated a Hold rating on GM, citing concerns around long-term growth prospects.

The experts acknowledged that the robust results, driven by higher volumes and sturdy pricing in North America and a 12 percent surge in unit sales in China, were encouraging. However, they added they can’t help but be concerned that 2016 is “the peak of the current cycle for U.S. auto sales.”

In fact, the firm is modeling a 1.1 percent increase in U.S. light vehicle sales for 2016, down from a 6 percent rise in 2015 and a 7.7 percent gain in 2014. Moreover, the analysts envision slower growth in international markets and even declines in some emerging markets. Argus is modeling a decline in earnings growth to 9.6 percent in 2016, down from 64.6 percent in 2015.

DateFirmActionFromTo
Jul 2016CitigroupMaintainsBuy
Jun 2016Piper JaffrayInitiates Coverage onOverweight
May 2016CitigroupMaintainsBuy

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