GM Stock Rating Boosted with Revised Price Target by RBC Capital | GM Stock News

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May 02, 2025
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RBC Capital has raised its price target on General Motors (GM, Financial) from $55 to $57, maintaining an Outperform rating for the stock. According to analyst Tom Narayan, GM's updated FY25 guidance outlines a scenario where the company fully absorbs the current tariff levels. Despite this, challenges with Korean imports remain significant; however, RBC Capital suggests that a potential agreement to reduce tariffs with Korea is quite feasible.

Wall Street Analysts Forecast

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Based on the one-year price targets offered by 26 analysts, the average target price for General Motors Co (GM, Financial) is $54.19 with a high estimate of $105.00 and a low estimate of $34.00. The average target implies an upside of 20.28% from the current price of $45.05. More detailed estimate data can be found on the General Motors Co (GM) Forecast page.

Based on the consensus recommendation from 30 brokerage firms, General Motors Co's (GM, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.

Based on GuruFocus estimates, the estimated GF Value for General Motors Co (GM, Financial) in one year is $60.52, suggesting a upside of 34.34% from the current price of $45.05. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the General Motors Co (GM) Summary page.

GM Key Business Developments

Release Date: May 01, 2025

  • Total Revenue: $44 billion, up 2% year-over-year.
  • EBIT Adjusted: $3.5 billion, with a margin of 7.9%.
  • EPS Diluted Adjusted: $2.78.
  • US Market Share: Increased to 17.2%, a nearly 2-point improvement year-over-year.
  • North America Margin: 8.8%, within the 8% to 10% target range.
  • EV Market Share: 10% in Q1, rising to 12% in March.
  • US Sales Growth: 17% year-over-year.
  • Inventory: 49 days for ICE US dealer inventory, down from 53 days in Q4.
  • GM Financial EBT Adjusted: Almost $700 million.
  • China Equity Income: Nearly $50 million.
  • 2025 EBIT Adjusted Guidance: $10 billion to $12.5 billion.
  • Adjusted Automotive Free Cash Flow Guidance: $7.5 billion to $10 billion.
  • Capital Expenditures: Expected in the range of $10 billion to $11 billion.
  • Share Repurchase Authorization: $4.3 billion capacity remaining, with a temporary pause on additional repurchases.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • General Motors Co (GM, Financial) reported a 17% year-over-year increase in US sales, outpacing every other major automaker.
  • The company gained nearly two full points of market share in the US, reaching 17.2%.
  • GM's first quarter share of the US EV market rose to 12% in March, solidifying its position as the number two EV seller.
  • The company achieved $3.5 billion in EBIT adjusted, with a margin of 7.9%, and $2.78 in EPS diluted adjusted.
  • GM's redesigned ICE SUVs, including the Chevrolet Equinox, Traverse, and Tahoe, are more profitable than the prior generation due to capital efficiency and manufacturing improvements.

Negative Points

  • General Motors Co (GM) faces a $4 billion to $5 billion impact from tariffs, affecting vehicles imported from Korea, Mexico, and Canada.
  • The company experienced cost pressures and lower full-size pickup wholesales due to planned downtime for plant upgrades.
  • FX was a headwind of around $300 million in the quarter, primarily due to weakness in the Mexican peso.
  • Fixed costs increased by $400 million year-over-year due to higher depreciation, ongoing warranty pressure, and higher labor costs.
  • The company is moderating EV production to align with consumer demand, which may reduce scale-driven profitability improvements.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.