GM credit rating drops after 'surprisingly weak' June sales

Thursday, July 05, 2007
GM credit rating drops after 'surprisingly weak' June sales
The Detroit News





Bear Stearns & Co. dropped its rating on General Motors Corp. shares to "peer perform" after the company reported a decline in its June U.S. sales from a year earlier, according to Bloomberg News.

Analyst Peter Nesvold, in a note to investors today, wrote that GM's shares may fall to as low as $33 as the automaker battles increased discounting by Japanese rivals and higher gasoline prices. Nesvold had rated the shares as "outperform."

GM's shares fell $1.41 to $36.57 at 7:47 a.m. before the start of regular New York Stock Exchange trading. They closed at $37.98 on July 3.

Meanwhile, Deutsche Bank AG, calling the June sales "surprisingly weak," lowered its full-year earnings estimate for GM to $2 a share, a 30 percent reduction.

The automaker's annual sales may be 2.8 million vehicles, less than its target of 3 million, analyst Rod Lache wrote in a note. He maintained his "buy" rating on the shares.













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