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Pro Analysis

Bank of America Merrill Lynch downgrades General Motors on 'peak auto' fears

A worker on the assembly line at the General Motors Assembly Plant in Arlington, Texas
Mike Stone | Reuters
A worker on the assembly line at the General Motors Assembly Plant in Arlington, Texas

Bank of America Merrill Lynch lowered its rating for General Motors to neutral from buy, saying investor worries over a potential auto industry downturn will limit share upside.

"Although we continue to believe that GM's earnings and cash flow will...improve in 2016e-2018e, we believe that sentiment is likely to keep a lid on the stock as the peak of the US auto cycle approaches," analyst John Murphy wrote in a note to clients Wednesday.

General Motors reported better-than-expected third-quarter financial results Tuesday.