Bobby Harvey
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Goldman Downgrades GM On Absolute Downside In 2018

Shares of General Motors Company GM 0.55% were trading lower by more than 3 percent early Monday morning likely in reaction to a downgrade by analysts at Goldman Sachs. The firm's David Tamberrino downgraded General Motors' stock rating from Neutral to Sell with an unchanged $32 price target.

The auto cycle likely peaked in 2016 when a total of 17.5 million vehicles were sold in the U.S., Tamberrino wrote in the downgrade note. As such, investors should turn cautious on the auto sector as the annual sales rates of new vehicles will normalize to just 15.0 million in 2020. This is particularly concerning for U.S.-based automakers as more than 100 percent of their profit and free cash flow is generated in North America. In General Motors' case, 106 percent of its automotive profit and 108 percent of free cash flow is generated in North America. Source