(By Balachander) UBS Securities lowered its price target on shares of General Motors Co. (NYSE:GM) to $30.00 from $34.00, while maintaining its "Buy" rating on the stock.
The brokerage also reduced 2012 EPS outlook to $3.50 from $4.00 and 2013 EPS estimate to to $4.50 from $4.95 to reflect its lower outlook for N American EBIT due to larger than expected mix headwinds.
UBS noted that GM reported adjusted EPS of $0.93, better than its $0.87 estimate and consensus of $0.85. EBIT of $2.2 billion was $340 million better than consensus, driven by better than expected results in Europe and S America. N America also beat excluding $300 million in one-time costs.
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The stock traded down today due to flat sequential EBIT guidance for N America for Q2 and Q3 and needed European inventory reductions, UBS said.
The company indicated the lower full-size pickup mix will result in relatively flat Q2/Q3 N American EBIT. This is consistent with the larger than expected Q1 mix headwind of $300 million y/y. UBS expected stronger mix due to the 20 percent y/y increase in Q1 pickup production; however this benefit was offset by the increase in small cars. The mix headwind will increase in Q2/Q3, and volume will likely not be enough to fully offset it.
UBS also expects Europe to decline q/q due to the G.M's need to cut inventory. The brokerage continues to forecast a $1.4 billion loss in Europe for the year.
GM stock, which has been trading in the 52-week range of $19.00 to $32.68, lost 0.74 percent to trade at $22.20 on Friday.