TALKING POINT/GENERAL MOTORS <GM> General Motors Corp staged an explosive rally on Wall Street after a share buyback program announced yesterday, but analysts said GM's future remains clouded by stiff competition and erosion of market share. GM shares rose 3-1/2 to 79-1/8 in active trading. Analysts agreed that investors liked the repurchase program but they differed sharply over the carmaker's long term prospects. "I'm very positive on GM," said Jack Kirnan of Kidder Peabody and Co. "They're clearly committed to enhancing shareholder value." However, some analysts worry about how GM will pay for the buyback and whether new models will enable the carmaker to recapture lost market share. After the market had closed yesterday, GM said it would buy back 20 pct of its common stock by the end of 1990. The announcement sent investors today scrambling for GM shares, with more than 3.2 mln shares changing hands by mid-day. The buyback plan caused several analysts bullish on the stock to reiterate buy recommendations this morning, and at least one increased his earnings estimates for GM based on a good performance expected from new car models. But David Healy of Drexel Burnham Lambert Inc said the repurchase program is not a positive. "The buyback doesn't really change the earnings outlook and puts more stress on the balance sheet," he said, since GM will have to borrow money to pay for the stock purchases. The stock should settle back down to around 76, he added. Healy projects GM will earn five dlrs a share in 1987 and 5.50 dlrs in 1988, compared to 1986 earnings of 8.21 dlrs. Healy's numbers are near the low end of Wall Street estimates, which range from five dlrs to 7.80 dlrs in 1987 and from four dlrs to 10.80 dlrs in 1988. Like other analysts, Healy sees GM's share of the domestic car and truck market falling in 1987. "On balance, GM cars are not selling as well as their competitors," he said. In late February, GM car sales fell 8.6 pct from the year-ago period while competitors Ford Motor Co <F> and Chrysler Corp <C> both posted increases. But GM said February sales showed improvement over January, adding that it expects improvement in coming months. Overall, GM's share of U.S. car and truck sales should fall to around 38 or 39 pct in 1987 from 41 pct at the end of 1986, analysts said. The numbers include imports. Kidder Peabody's Kirnan said cost reductions and product improvements this year should lead to positive cash flow by the fourth quarter, which will help GM finance the buyback. "GM (stock) has been a real laggard and now it's rolling up its sleeves and getting serious. I think there's a major earnings surprise in the winds," he said. Kirnan raised his earnings estimates slightly today, in part in reaction to the announced buyback, and sees GM earning 5.65 dlrs this year and 9.75 dlrs in 1988. "The company is more concerned than ever about improving their relative valuation with respect to Ford and Chrysler," he said. Another positive for the stock is GM's dividend, currently five dlrs a share annually, which gives it a higher yield than its competitors, Kirnan said. And GM will raise the cash dividend 25 to 50 cts a share next year, he predicted. But analyst Michael Lucky of Shearson Lehman Brothers Inc said U.S. car sales will weaken, and GM's new products, if successful, will only slow but not halt the erosion of its market share. "I believe their new cars will be successful, but that will only curtail losses in market share," which will fall to around 35 pct by 1990, Lucky said. Philip Fricke of Goldman Sachs and Co falls in the middle of the bulls and bears. While he is recommending GM stock, he said results will not improve until 1988. "I'm not looking for improvement this year. This is a transition year for GM," he said. Fricke, who estimates 1987 earnings at 7.80 dlrs and 1988 at 10.80 dlrs, said cost cutting and new car models will not affect 1987 results. "But the key thing isn't so much what they earn this year. It's the momentum beyond this year that's important."