General Motors (GM, Financial) has maintained its forecast of a $4 billion to $5 billion gross tariff impact for the fiscal year 2025. To counteract this, the company is actively working on mitigating at least 30% of these costs through manufacturing strategies, specific cost-cutting measures, and steady pricing efforts.
In the second quarter, GM reported a net impact of $1.1 billion, which includes minimal offsetting efforts. Looking ahead, the company anticipates a higher net impact for the third quarter, primarily due to the timing of indirect tariff expenses.
Additional projections include an increase in North American pricing by 0.5% to 1.0% year-over-year and a headwind in warranty costs. GM's Global Markets, excluding China, are expected to perform similarly to 2024, while equity income from China is projected to remain profitable throughout the year.
For GM Financial, adjusted earnings before taxes are predicted to range from $2.5 billion to $3.0 billion. Savings from the Cruise division are estimated to be around $500 million. The effective tax rate, adjusted, is expected to fall between 17% and 19%. The full-year earnings per share guidance is based on a slightly lower weighted average of diluted shares, below one billion.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 28 analysts, the average target price for General Motors Co (GM, Financial) is $55.18 with a high estimate of $83.00 and a low estimate of $34.00. The average target implies an upside of 3.71% from the current price of $53.21. More detailed estimate data can be found on the General Motors Co (GM) Forecast page.
Based on the consensus recommendation from 31 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 $60.28, suggesting a upside of 13.29% from the current price of $53.21. 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.
