GM Stock Gains Ahead Of Q4 Earnings, Retail Traders Turn Bullish

Shares of General Motors rose over 1% on Monday morning, touching a one-month intraday high even as broader markets saw a tech-led selloff. 

The uptick comes ahead of the automaker’s fourth-quarter earnings report, due Tuesday, with Wall Street expecting adjusted earnings of $1.82 per share on revenue of $44.66 billion.

General Motors has exceeded both earnings and revenue estimates in its past four quarterly reports, fueling investor optimism. 

On Friday, RBC Capital raised its price target on GM to $67 from $65, maintaining an ‘Outperform’ rating. 

RBC’s channel checks indicate steady January U.S. auto sales, even with seasonal softness. Analysts also see a potential recovery in EV demand in 2025, spurred by new, lower-priced models.

The automaker’s 2024 U.S. sales climbed 4% year-over-year to 2.7 million vehicles—the highest since 2019 — with Q4 sales surging 21%. Electric vehicle sales saw a 50% annual increase and a 125% quarterly jump, doubling GM’s EV market share over the year.

Sentiment for GM shifted to ‘bullish’ on Stocktwits by Monday afternoon, with an uptick in message volume. 

Retail traders highlighted unusual options activity, specifically in mid-February $60 calls, alongside hopes for strong Q4 results.

GM’s recent moves, including a multibillion-dollar EV supply chain deal with a Norwegian firm and strategic pivots in China, have boosted investor sentiment. 

Analysts have also labeled its decision to halt funding for its autonomous vehicle unit, Cruise, and an aggressive share buyback plan as prudent steps to enhance shareholder value.

The stock trades at a trailing price-to-earnings (P/E) ratio of 5.9x and a forward multiple of 5.2x, a significant discount compared to rival Ford’s trailing multiple of 11.7x and forward multiple of 6.3x. 

GM shares remain 10.3% below the average analyst price target, per Koyfin data, even as they have returned 55% over the past 12 months.

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