GM’s vindication on Wall Street is here as it will surpass its peers in 2024

DETROIT— general motors is proving to be a standout among automakers this year as it continues to consistently beat earnings expectations from Wall Street and its competitors.

Shares of the Detroit automaker are up 54.7% before Monday’s open, outperforming its traditional competitors. teslaand electric vehicle startups in the US. Lucid Group and Rivian Automotive.

“You may not believe it yet, but it’s true, GM is still working on trucks,” BofA Securities analyst John Murphy wrote in a note to investors in October, after the automaker beat Wall Street expectations for the third quarter.

GM has done so with the help of $12.4 billion in stock buybacks since last November, which the automaker says will continue for the foreseeable future. But it is also proving to be better operationally than its city rivals. Ford engine and parent company of Chrysler Stellaras well as other peers in the sector.

CEO and President Mary Barra has touted that kind of differentiation for years, but it has largely fallen on deaf ears. For the most part, GM stock has traded in lockstep with Ford’s due to its histories and the cyclical nature of the auto industry.

But not this year. Ford shares fell 10% at the close on Friday. Others, including ferrariwhich has been among the best-performing auto companies on Wall Street, are also behind GM.

Even with Tesla shares rising more than 30% over the past week after President-elect Donald Trump won the US presidential election, the electric vehicle maker continues to lag GM. Tesla CEO Elon Musk campaigned hard for Trump.

• General Motors (GM): 54.7%
• Ferrari (CAREER): 34.3%
• Tesla (TSLA): 29.3%
• Hyundai Motor* (HYMTF): 27.9%
• BYD Co.* (Will): 27.2%
• ToyotaEngine (TM): down 6.2%
• Ford (F): 10% drop
• Hondamotors (HMC): down 13.3%
• Volkswagen* (VWAGY): down 28.2%
• NissanEngine* (NSANY): down 36.1%
• li car (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 has actually raised key financial targets despite facing continued market challenges in the U.S. and its China operations having lost hundreds of millions of dollars amid increased competition.

While GM has said it is cutting costs, it hasn’t had to be as aggressive as other automakers this year. Nissan, Volkswagen and Stellantis are carrying out massive corporate restructurings that include layoffs, production cuts and other cost-saving measures.

GM stock under Barra, who began leading the automaker in January 2014, has been lackluster for investors for most of his tenure. The average closing stock price during her tenure is $38 per share, lower than the closing price of $40.02 per share before she became CEO, according to FactSet data.

Cumulatively, as of Friday’s close, shares have risen 38.9% during Barra’s tenure. That compares to a nearly 300% rise for the S&P 500 over that period. GM’s all-time high stock price under Barra was $67.21 on Jan. 5, 2022, when Barra laid out GM’s electric vehicle ambitions and growth plans.

Whether GM can continue its hot streak next year remains to be seen, but the automaker has reported that it expects the company’s performance in 2025 to be in line with this year’s, including signs of a stronger fourth quarter. weak.

Barra, speaking in quarterly earnings on Oct. 22, reiterated his stance that GM will continue to “leverage our competitive strength and deliver the performance that differentiates us from others in the industry.”

“We are going to be disciplined and resilient, and we will make adjustments as we can to continue driving growth and profitability,” Barra said. “In the coming weeks and months, you will see more clearly than ever how we intend to take advantage of the tailwinds that are under our control to achieve strong results in 2025 that are in a similar range to those of 2024.”

On average, GM shares are overweight with a price target of $59.85 per share, according to average Wall Street estimates compiled by FactSet.