General Motors Company (GM) will have to recall 5.9 million trucks and SUVs equipped with Takata air bag inflators, after its petition to avoid the callback has been rejected by the US National Highway Traffic Safety Administration.
General Motors shares closed higher for a fourth consecutive trading session in New York on Monday. It has also been the sharpest single-session gain since November 13th. The stock went up 4.02% ($1.73) to $44.77, after touching an intraday high at $45.16, or a price level not seen since January 16th 2018 ($45.52).
Shares of General Motors Company have risen 22.32% so far in 2020 compared with a 10.73% gain for the benchmark index, S&P 500 (SPX).
In 2019, General Motors’ stock went up 9.42%, thus, it underperformed the S&P 500, which registered a 28.88% gain.
The National Highway Traffic Safety Administration ordered the auto maker to recall the vehicles produced between 2007 and 2014, since the inflators were “at risk of the same type of explosion after long-term exposure to high heat and humidity as other recalled Takata inflators.”
General Motors has said that it could incur $1.2 billion in costs if the company had to replace air bag inflators it had sought to avoid fixing.
Analyst stock price forecast and recommendation
According to CNN Money, the 15 analysts, offering 12-month forecasts regarding General Motors Company’s stock price, have a median target of $47.00, with a high estimate of $72.00 and a low estimate of $30.00. The median estimate represents a 4.98% upside compared to the closing price of $44.77 on November 23rd.
The same media also reported that at least 13 out of 17 surveyed investment analysts had rated General Motors Company’s stock as “Buy”, while 2 – as “Hold”.