Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 6 May, 25 | GM | Buy | USD 45.38 | USD 47.6 | USD 49.9 | 3 days | Closed |
5.70%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
General Motors Company designs, builds, and sells trucks, crossovers, cars, and automobile parts; and provide software-enabled services and subscriptions worldwide. The company operates through GM North America, GM International, Cruise, and GM Financial segments. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling brand names. The company also sells trucks, crossovers, cars, and automobile parts through retail dealers, and distributors and dealers, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, it offers range of after-sale services through dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories, and extended service warranties; and safety and security services for retail and fleet customers, including automatic crash response, emergency services, roadside assistance, crisis assist, stolen vehicle assistance, and turn-by-turn navigation. Further, the company provides connected services comprising mobile applications for owners to remotely control their vehicles and electric vehicle owners to locate charging stations, on-demand vehicle diagnostics, GM Smart Driver, Amazon Alexa in-vehicle voice, Google's Voice Assistant, navigation and app ecosystem, connected navigation, SiriusXM with 360L, and 4G LTE wireless connectivity. Additionally, the company provides automotive financing and insurance services; and software-enabled services and subscriptions. General Motors Company was founded in 1908 and is headquartered in Detroit, Michigan.
Adjusted automotive free cash flow grew by $2.38 billion, reaching $14.05 billion in 2024, exceeding the guidance range
Adjusted EBIT increased by $2.58 billion year-over-year to $14.93 billion in 2024, representing a 20.9% improvement
China equity income swung by $4.85 billion from a profit of $446 million in 2023 to a loss of $4.41 billion in 2024
Net income fell by $4.12 billion to $6.01 billion in 2024, a 40.7% decrease compared to 2023, largely due to one-time charges
General Motors faces material investment risk due to volatility in its China joint ventures and shifting strategies in autonomous vehicle development, both of which could lead to further impairments or reduced earnings visibility
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 45.38 | 39.0 | 47.6 | 49.9 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Significant Impact from Special Charges in Q4 2024
General Motors (GM) reported a sharp decline in its fourth-quarter 2024 net income due to over $5 billion in special charges. These were mainly driven by $4 billion in non-cash restructuring charges and the impairment of interests in certain joint ventures in China. Additionally, the decision to halt funding for the Cruise robotaxi initiative led to further charges of approximately $500 million. As a result, the company posted a net loss of $2.96 billion in Q4 2024, compared to a profit of $2.1 billion in the same quarter of 2023.
Solid Full-Year Performance Despite One-Time Costs
Despite the Q4 setback, GM's full-year 2024 results were strong across several key operational metrics. Revenue rose 9.1% year-over-year to $187.4 billion, while EBIT-adjusted increased 20.9% to $14.9 billion. Adjusted automotive free cash flow also improved significantly, rising by $2.4 billion to reach $14.0 billion. EPS-diluted-adjusted grew 38% year-over-year to $10.60, exceeding the company’s guidance and reflecting the strength of its core operations excluding one-time charges.
Regional and Segment Performance
GM North America (GMNA) continued to deliver strong financial results, generating $14.5 billion in EBIT-adjusted in 2024, up 18.1% from the previous year. The GMNA EBIT-adjusted margin expanded by 0.5 percentage points to 9.2%. However, GM International (GMI) experienced a steep 75% decline in EBIT-adjusted to $303 million, primarily due to challenges in overseas markets. Notably, China equity income swung sharply negative, from $446 million in 2023 to a loss of $4.4 billion in 2024, driven by impairment-related charges.
Cruise Restructuring and Future Implications
The company incurred significant expenses associated with its Cruise autonomous vehicle business, reflecting a strategic pivot away from aggressive expansion in the robotaxi sector. This move is expected to yield a $0.5 billion year-over-year reduction in related costs for 2025, potentially contributing to improved profitability. GM’s 2025 guidance incorporates this benefit while indicating a continued commitment to innovation through targeted investments in battery cell manufacturing and electrification.
Strong Cash Flow and Capital Allocation
GM's automotive operating cash flow reached $23.9 billion in 2024, a 14.9% increase from 2023, and above the high end of its guidance range. Adjusted automotive free cash flow exceeded expectations, reflecting disciplined cost management and efficient capital deployment. For 2025, the company expects adjusted automotive free cash flow between $11.0 billion and $13.0 billion, along with capital spending between $10.0 billion and $11.0 billion, including ongoing investments in joint ventures focused on EV battery production.
2025 Outlook Reflects Confidence and Growth Expectations
Looking ahead, GM has issued robust financial guidance for 2025, projecting net income attributable to stockholders between $11.2 billion and $12.5 billion, and adjusted EBIT in the range of $13.7 billion to $15.7 billion. Diluted adjusted EPS is expected to be between $11.00 and $12.00, representing continued confidence in the company’s core automotive performance, cost reductions, and capital discipline. These projections assume a stable policy environment in North America and no additional financial headwinds from its China operations.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on General Motors Company (NYSE: GM) at the closing market price of USD 45.38, as on May 05, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Consumer Cyclical Industry: Auto Manufacturers
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| GM General Motors Company |
0.21 0.40% | 52.89 | 4.98 | 4.62 | 0.28 | 0.65 | 0.77 | 5.45 |
| TSLA Tesla Inc |
-0.3 0.10% | 315.35 | 45.91 | 67.57 | 5.67 | 8.35 | 12.42 | 58.23 |
| TOYOF Toyota Motor Corp |
-0.57 3.22% | 17.13 | 8.97 | 9.44 | 0.0059 | 1.11 | 0.0097 | 0.05 |
| TM Toyota Motor Corporation ADR |
2.88 1.67% | 174.89 | 8.87 | 9.34 | 0.0052 | 1.07 | 1.27 | 6.98 |
| BYDDY BYD Co Ltd ADR |
0.17 0.18% | 93.50 | 22.64 | 15.60 | 0.17 | 4.62 | 1.08 | 16.52 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 05,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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