Banc of America official Ronald Talross feels that General Motors' financial picture is actually worsening, based on a meeting last week with GM CFO Fritz Henderson. While Talross claims to have been impressed with Henderson's straightforward approach, it is said that there were "no original solutions" presented with regard to GM's slipping market share, and that without a "silver bullet" solution to this problem, the automaker's stock price should resume its downward slide. The analyst maintained that a target share price of $10 is still accurate, which would require a drop of over 60 percent from the most recent closing price of $26.09.
Talross' opinion is sure to give the vapors to those who see the automaker's month-long rally (with an increase in share price of 30 percent) as the first sign of a return to greatness. Others will point to the unresolved Delphi situation, flaky accounting, and the inability of the automaker to arrest its sliding sales and deal with overcapacity issues as reasons that GM has a long ways to go before it can be considered a good investment. Go ahead and battle this one out in the Comments, but we'll be looking towards the financial markets to provide a definitive answer.
Interestingly, the same analyst weighed in on Toyota with a "neutral" rating, stating that Toyota's margins and investment in future product are encouraging, but that the automaker's growth targets will be extremely difficult to meet while maintaining quality.
[Source: Forbes, Money/CNN, Detroit News]