What happened
General Motors (GM 0.07%) wasn't a smoothly humming engine of a stock these past few days. The vehicle maker saw its shares decline by over 8% this week following uninspiring U.S. sales figures released last Friday afternoon, plus a few other uninspiring developments.
So what
Those General Motors U.S. sales numbers were more or less in line with analyst expectations, but that doesn't mean they were great. The company's first-quarter tally was 512,846 vehicles, which represented a 20% year-over-year decline.
Image source: Getty Images.
On Tuesday, General Motors and Honda announced they will team up to develop and sell a range of lower-priced electric vehicles (EVs). Investors were nonplussed about this prospect and sold off the stocks of the two companies after this reveal. Most likely, many felt that this was a "too little, too late" defensive reaction to the spiraling success of higher-end American EV manufacturer Tesla (TSLA 1.99%).
Compounding this, two analysts who are becoming less impressed with General Motors also weighed in during the week.
Barclays prognosticator Brian Johnson cut his price target on the stock to $59 per share from his previous $68, although he's maintaining his overweight (buy) recommendation.
Johnson's peer at Bank of America, John Murphy, enacted a series of adjustments in recommendations and price targets for several automobile stocks. One was General Motors; he now believes the stock is worth $95 per share, down a bit from his previous price target of $100. In his view, though, General Motors is still a buy.
Now what
The hot action in the vehicle sector these days is with more pure-play EV stocks like Tesla or Nio. Incumbents such as General Motors will need to really put their money where their mouths are with such products if they're going to bring the bulls back to any extent.
I wouldn't count them out, though. If that high-powered General Motors/Honda pairing can effectively develop quality EVs at attractive price points, it can certainly steal a march on the Teslas of this world.
