GM Extends Production Downtime At Some Plants Due To Chip Shortage

General Motors production has been hit hard by the semiconductor shortage. The automobile giant announced on Feb. 9 that it will need to extend the temporary downtime at its production plants in Kansas, Canada and Mexico until the middle of March.

GM (GM) said, “GM’s plan is to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs and Corvettes for our customers.”

Shares of GM fell 1.4% to $56.06 at the close on Feb. 9.

Earlier this month, the company warned of a semiconductor shortage impacting its production lines this year and announced the temporary shutdowns at some of its production plants. Additionally, GM said that its Bupyeong 2 assembly plant in Korea will be operating at half of its capacity from Feb. 8. (See General Motors stock analysis on TipRanks)

Meanwhile, Ford (F) estimated that a semiconductor shortage could impact 10% to 20% of its planned production in the first quarter of this year.

Following the GM announcement, Barclays analyst Brian Johnson raised the stock’s price target from $56 to $64 and reiterated a Buy rating.

Johnson believes that GM’s new business unit GM HydroTec for hydrogen fuel cells has “at least some potential,” as it has also collaborates with Navistar International and Nikola (NKLA). The analyst argues that hydrogen fuel cells are likely be an important product for the medium and heavy-duty truck market.

The rest of the Street is bullish about the stock with a Strong Buy consensus rating. That’s based on 12 analysts recommending a Buy and 1 analyst suggesting a Hold. The average analyst price target of $58.08 implies 3.6% upside potential to current levels.

According to the TipRanks Smart Score system, GM scores a “Perfect 10” indicating that the stock has a high likelihood of outperforming the market.

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