General Motors (GM) is keeping its momentum after a solid third quarter. The company reported higher U.S. market share, steady profits in China, and stronger cash flow, even as it faced some setbacks in its EV business. Subsequently, GM shares rose 4.2% to close at $69.66 on Friday. Following the company’s Q3 earnings report, the Street’s analysts now have an average 12-month price target of $73.56 and a Moderate Buy consensus rating.
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Earnings and Guidance
During its latest earnings call, General Motors raised its full-year forecast. The company now expects EBIT-adjusted profit of $12 billion to $13 billion and free cash flow of $10 billion to $11 billion. Management highlighted a 17% share of the U.S. market, the highest third-quarter level since 2017. In addition, the company’s OnStar and Super Cruise services added more users, with subscriptions up 34% from a year earlier.
Profitability also improved in China, where General Motors’ restructured business earned $80 million in equity income. However, the company recorded a $1.6 billion special charge tied to its EV and hydrogen programs, and it reported $900 million in higher warranty costs. GM also paused production of its BrightDrop electric van due to slower demand in the commercial segment.
Analyst View and Stock Outlook
On the analyst front, Citi’s four-star analyst Michael Ward kept a Buy rating on GM and set a price target between $75 and $86. He noted that the company has adapted well to changing market conditions and managed costs carefully despite lower earnings per share from last year. Ward said GM’s steady guidance and share repurchase program, which has reduced the share count by about 35% since 2021, support confidence in the stock.
Is GM Stock a Buy Now?
As noted above, General Motors has a Moderate Buy consensus rating, based on 18 analysts’ ratings. The average GM stock price target stands at $73.56, implying a 5.60% upside from the current price.
