Citi Analyst Updates Price Targets Ahead of Q2 Earnings

Citi auto analyst Itay Micheli recently updated his price targets for various companies ahead of the second-quarter earnings reports. While Tesla received the biggest price target increase, Micheli has a different perspective on the best investment opportunity for the upcoming earnings.

Tesla's Price Target Raised to $278

Micheli has raised the target price for Tesla (TSLA) to $278 per share, a significant increase from the previous $215 level. This boost represents a nearly 30% rise; however, Micheli maintains a Hold rating on the stock. The increase is primarily driven by better-than-expected delivery figures in the second quarter. During this period, Tesla delivered a record-breaking 466,000 units, surpassing market expectations of around 447,000 units.

Tesla Price Targets on the Rise

Following the delivery report, Wall Street has also revised its Tesla price targets upwards, with an average analyst target of approximately $223 per share. Currently, in premarket trading, Tesla stock is valued at around $272, showing a 0.7% increase. Furthermore, futures for S&P 500 and Nasdaq Composite are up 0.3% and 0.4%, respectively.

General Motors Price Target Increased to $89

Apart from Tesla, Micheli has also raised his price target for General Motors (GM) to $89 per share, compared to the previous $85 valuation. The increase represents a 5% bump; however, in premarket trading, GM stock is priced at $40.25, indicating a modest gain of approximately 0.5%.

With these updated price targets, investors eagerly anticipate the upcoming earnings reports to evaluate the performance of these automotive giants.

Analyst Rates GM Stock Buy, Expects Positive Catalyst

Automotive analyst Michaeli has recently given a Buy rating to General Motors (GM) shares and has also initiated a "30-day positive catalyst watch" on the stock. This indicates his expectation of imminent movement in the GM shares. Michaeli anticipates a strong quarter for GM, projecting a "beat-and-raise" scenario that will drive the stock's value even higher. At present, Wall Street analysts predict GM to report second-quarter operating profit of approximately $3.1 billion. GM had previously announced an expected operating profit of around $12 billion for the full year.

In the first half of 2023, GM stock performed less favorably compared to Ford and Tesla, according to Michaeli. However, with robust pricing trends and an increase in industry sales, he believes that GM has the potential to achieve earnings per share as high as $8 for 2023. Wall Street estimates are closer to $7.

Since the beginning of this year, GM stock has seen an increase of about 19%. In comparison, Ford stock has gained approximately 31%, while Tesla shares have experienced an astounding rise of 119%.

Michaeli has also raised his target price for Ford Motor (F) shares from $16 to $17. He rates Ford shares as Buy, but hasn't initiated a positive catalyst watch on this stock.

Among Michaeli's peers, GM is the most favored stock. Around 56% of analysts covering GM shares rate them as Buy, surpassing the average Buy-rating ratio for stocks in the S&P 500, which stands at about 55%. In contrast, Tesla and Ford shares have Buy-rating ratios of approximately 43% and 39%, respectively.