GM's Wall Street vindication is happening as it outperforms its peers in 2024
GM is proving it's a standout among automakers this year as it continues to consistently outperforms Wall Street's earnings expectations and its competitors.
JimMin
Mary Barra, chair and chief executive officer of General Motors Co., during a news conference at the Hudson's building in Detroit, Michigan, US, on Monday, April 15, 2024.
Jeff Kowalsky | Bloomberg | Getty Images
DETROIT — General Motors is proving it's a standout among automakers this year as it continues to consistently outperform Wall Street's earnings expectations and its competitors.
Shares of the Detroit automaker have risen 54.7% ahead of Monday's opening, outperforming legacy competitors, Tesla and U.S. electric vehicle startups Lucid Group and Rivian Automotive.
"You may still not believe it, but it's true, GM keeps on trucking," BofA Securities analysts John Murphy wrote in an investor note last month after the automaker beat Wall Street's third-quarter expectations.
GM has done so with the assistance of $12.4 billion in stock buybacks since last November, which the automaker said will continue for the foreseeable future. But it's also proving itself to be operationally better than its crosstown rivals Ford Motor and Chrysler parent Stellantis, as well as other sector peers.
General Motors vs. Ford Motor stock
CEO and Chair Mary Barra has touted that kind of differentiation for years, but it has largely fallen upon deaf ears. For the most part, GM stock has traded in lockstep with Ford due to their histories and the cyclical nature of the automotive industry.
But not this year. Ford stock is off 10% as of Friday's close. Others, including Ferrari, which has been among Wall Street's top auto performers, are also trailing GM.
Even with shares of Tesla surging more than 30% during the past week following President-elect Donald Trump winning the U.S. presidential election, the electric vehicle maker continues to trail GM. Tesla CEO Elon Musk heavily campaigned for Trump.
General Motors (GM): 54.7%Ferrari (RACE): 34.3%Tesla (TSLA): 29.3%Hyundai Motor* (HYMTF): 27.9%BYD Co.* (BYDDF): 27.2%Toyota Motor (TM): down 6.2%Ford (F): down 10%Honda Motor (HMC): down 13.3%Volkswagen* (VWAGY): down 28.2%Nissan Motor* (NSANY): down 36.1%Li Auto (LI): down 36.8%Stellantis (STLA): down 42.5%Nio Inc. (NIO): down 43.9%Lucid (LCID): down 47.5%Rivian (RIVN): down 54.9%* Over-the-counter shares
GM, unlike many competitors, has not lowered its 2024 guidance or underperformed Wall Street's quarterly earnings expectations. Instead, it's actually raised key financial targets despite facing ongoing market challenges in the U.S. and its Chinese operations losing hundreds of millions of dollars amid increased competition.
While GM has said it's cutting costs, it has not had to be as aggressive as other automakers this year. Nissan, Volkswagen and Stellantis are conducting massive business restructurings that include layoffs, production cuts and other cost-saving measures.
Shares of GM under Barra, who started leading the automaker in January 2014, have been lackluster for investors for most of her tenure. The stock's average closing price under her tenure is $38 per share —lower than the $40.02 per share closing price before she became CEO, according to FactSet data.
Cumulative, as of Friday's close, shares are up 38.9% under Barra's tenure. That compares to a nearly 300% increase for the S&P 500 during that timeframe. GM's all-time high stock price under Barra was $67.21 on Jan. 5, 2022, as Barra presented GM's EV ambitions and growth plans.
Whether GM can continue its hot streak going into next year is yet to be seem, but the automaker has advised it expects the 2025 performance of the company to be in line with this year, including signaling a weaker fourth quarter.
Barra, when discussing quarterly earnings Oct. 22, reiterated her stance that GM will continue to "build on our competitive strength and deliver the performance that differentiates us from others in the industry."
"We're going to be disciplined and we'll be resilient, and we'll make adjustments to the extent that we can to continue to drive growth and profitability," Barra said. "In the weeks and months ahead, you'll see more clearly than ever how we intend to leverage the tailwinds that are within our control to deliver strong results in 2025 that are in a similar range to 2024."
GM stock on average is weighted overweight with a price target of $59.85 per share, according to average Wall Street estimates compiled by FactSet.
