General Motors (NYSE: GM) will release its second-quarter 2024 results on July 23. The Zacks Consensus Estimate forecasts earnings at $2.59 per share and revenues at $45 billion and indicates a substantial 35% year-over-year growth in earnings and a slight 0.4% revenue increase. With GM consistently surpassing EPS estimates—averaging 17.75% over the past four quarters—this report could be crucial for those considering a move on GM's stock.
What's New?
GM has posted its best U.S. quarterly sales in over three years, delivering 229,000 full-size pickup trucks and 21,930 electric vehicles (EVs) in Q2 2024, marking significant year-over-year growth. The EV segment, in particular, saw a 40% increase in deliveries, driven by robust sales of the electric Hummer and LYRIQ models. However, it's not all smooth sailing—sales in China dropped by 29% year-over-year, affecting all of GM's brands, with Buick, Chevrolet, and Cadillac experiencing significant declines.
GM's innovations, such as the Ultium Drive system and new battery plants in Ohio, Tennessee, and Lansing, MI, are set to bolster its position in the EV market. Yet, CEO Mary Barra's comments on slower-than-expected EV market development have raised concerns. Barra noted, "We won't get to a million just because the market is not developing, but it will get there."
Making The Case
On the bullish side, UBS maintains a "Buy" rating with a $61 price target, highlighting GM's strong North American sales, expanding EV lineup, and cost reduction efforts. GM's target is to save $2 billion by year-end, and its substantial liquidity of over $33 billion is a strong positive.
Conversely, Wells Fargo analysts hold an "Underweight" rating with a $32 price target, pointing to declining sales in China and high capital expenditures as significant risks. The high capital and R&D expenditure, particularly in GM's Cruise autonomous vehicle unit—which faced setbacks, including a suspension of driverless services in late 2023—also weighs on investor sentiment. Furthermore, GM's joint venture in China sharply declined, with deliveries falling significantly across its brands.
While GM's fundamentals are strong, the mixed signals and market volatility suggest that waiting for the earnings report could provide a clearer picture. The sentiment among big-money traders is split, with 52% bullish and 34% bearish, highlighting the uncertainty and potential volatility in GM's stock leading up to the earnings announcement.
Neither Sean Kelland nor Stocks.News has positions in this company.
Did you find this insightful?
Bad
Just Okay
Amazing
Disclaimer: Information provided is for informational purposes only, not investment advice. We do not recommend buying or selling stocks. Stock price discussions are based on publicly available data. Readers should conduct their own research or consult a financial advisor before investing. Owners of this site have current positions in stocks mentioned thru out the site, Please Read Full Disclaimer for details Here https://app.stocks.news/page/disclaimer
Financial Commentator
Sean Kelland is a financial commentator with a keen interest in the intricate interplay between geopolitical movements and market dynamics. With a sharp eye for curating leading analyst insights, Sean delivers timely and impactful financial content that navigates the complexities of the global market. Drawing on his extensive experience in content creation and writing, he provides readers with val...