General Motors' Strong Q3 Earnings Impress Analysts, Highlights Turnaround And EV Profitability Focus

General Motors Company GM reported third-quarter adjusted earnings per share of $2.96, surpassing expectations, and sales of $48.757 billion, which was up 10.5%.

The company’s adjusted EBIT rose 15.5% to $4.115 billion, with a cash balance of $23.7 billion at quarter-end.

Analysts covering the auto behemoth provided their takes:

• Wedbush analyst Daniel Ives reiterated the Outperform rating on the stock, with a price forecast of $55.
• Goldman Sachs analyst Mark Delaney maintained the Buy rating on the stock, with a price forecast of $61.

Wedbush: According to the analyst, General Motors’ quarterly performance represents a significant step in the right direction as management navigates challenging conditions. The company remains laser-focused on achieving its 200,000 production target for the year, while anticipating a positive variable run rate by the end of 2024, benefiting from its investments.

This “long-awaited turnaround” for General Motors showcases its commitment to balancing production and profitability, Ives adds.

Also Read: General Motors Q3 Earnings: Revenue And EPS Beat, Raises Annual Profit Outlook On Growing Consumer Demand

Goldman Sachs: The analyst notes that the transition from the third quarter to the fourth quarter will be a crucial focus for the firm.

In addition, the analyst writes that the state of the underlying auto business, particularly pricing trends as some competitors address high inventory levels in the U.S., General Motors’ performance in China and profit outlook, free cash flow and capital allocation, and Cruise’s progress may be focus areas.

However, given the company’s positive remarks about 2025 EBIT during its recent investor day, Delaney highlights that the underlying business remains strong.

The analyst emphasizes that the company reiterated key points from its October investor day, including expectations for its EV business to achieve variable profit in the fourth quarter of 2024, plans to produce and wholesale around 200,000 EVs in 2024, and an anticipated profitability boost of $2 billion to $4 billion from EVs in 2025.

Price Action: GM shares are trading higher by 9.25% to $53.46 at last check Tuesday.

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