GM’s stock has hit a 26-year low after Citigroup Inc. changed the company’s outlook from ‘buy’ to ‘hold’ yesterday morning. Shares bottomed out at $16.87 and the wrapped up the day at $17.42 on the NYSE. In a research memo released on May 26, Citigroup analysts said that due to “intensifying industry headwinds” and a lack of cash will hurt GM, despite restructuring and vehicle improvements efforts.
The memo went as far as to say that the American auto industry as whole will face tough conditions and a surge in commodities. Both GM and Ford together have lowered their outlook for U.S. sales in 2008 to near 15 million units.
Ford shares also hit fell over 3.5 percent, the lowest since April 11. The stock has fallen almost 15 percent since FoMoCo announced on Thursday that it is not expected to return to profitability in 2009 as it had expected.
Source: Automotive News (Subscription Required)