General Motors Q3 Earnings Preview: Analyst Warns Of 'Rising Earnings Headwinds'

Automotive giant General Motors Co GM will likely highlight the progress the company is making in electric vehicle production when the company reports third-quarter financial results before the market opens Tuesday.

Earnings Estimates: Analysts expect General Motors to report third-quarter revenue of $44.59 billion, up from $44.13 billion in last year's third quarter, according to data from Benzinga Pro.

The company has beaten analyst estimates for revenue in nine straight quarters.

Analysts expect the company to report third-quarter earnings per share of $2.43, up from last year's $2.28. The company has beaten analyst estimates for earnings per share in eight straight quarters and nine of the last 10 quarters overall.

General Motors raised its full-year EPS outlook to a range of $9 to $10 after second-quarter results, marking two quarters in a row of raised estimates.

What Analysts Are Saying: Analysts have been mixed on General Motors stock over the past two months heading into the third-quarter earnings print.

"GM shares have appreciated +85% since last November, but now our data signals rising earnings headwinds, and we think there is a risk the company will announce additional capital requirements during its October CMD. We want to wait and see," Bernstein analyst Daniel Roeska recently said.

The analyst downgraded General Motors shares from Outperform to Market Perform with a price target of $53.

Roeska expressed concern about General Motors’ inventory build-up in the U.S., which could pressure prices in 2024. A delayed push into electric vehicles could also impact losses next year, the analyst warned.

"The company is not likely to meet its BEV sales target, it's announced a collaboration to work on new technology, has been struggling in China, and has not clearly defined its plans for Cruise. Each of these issues presents a challenge to FCF generation in the short term."

Here are other recent analyst ratings on General Motors and their price targets:

• Barclays: Maintained Overweight rating, raised price target from $60 to $64
• RBC Capital: Reiterated Outperform rating, with a price target of $54
• Wedbush: Reiterated Outperform rating, with a price target of $55
• Goldman Sachs: Maintained Buy rating, raised price target from $53 to $61

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Key Items to Watch: General Motors reported third-quarter vehicle deliveries of 659,601, down 2% in the U.S.

While overall vehicle deliveries were down, General Motors saw its electric vehicle sales hit records with 32,095 units sold in the third quarter. The company will likely highlight this record and progress during the results, with EV sales up 60% year-over-year and up 46% quarter-over-quarter.

The company saw strong sales of its Equinox EV and Silverado EV in the quarter. While the company's individual vehicles trail models from rivals like Ford and Tesla, GM's collective efforts are paying off with strong overall EV sales.

GM ranked second in the U.S. for electric vehicle sales in the third quarter, trailing only Tesla.

"GM's EV portfolio is growing faster than the market because we have an all-electric vehicle for just about everybody, no matter what they like to drive," GM executive vice president Rory Harvey said.

The company may use the third-quarter earnings release and conference call as a chance to highlight upcoming electric vehicle models like the 2025 Cadillac Escalade IQ and 2025 Cadillac Optiq. The company could also highlight the more affordable Silverado EV coming this year that could better compete with Ford's F-150 Lightning pickup truck.

General Motors could also provide a more detailed look at China and how the company's goal of returning to profit in the region is progressing.

GM Price Action: General Motors shares are down 0.33% to $49.02 on Monday versus a 52-week trading range of $26.30 to $50.50. General Motors stock is up 35% year-to-date in 2024.

Read Next:

• General Motors Gives Q3 Delivery Update

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