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Why GM Stock Jumped 11% This Week

  

Category:  News & Politics

Via:  jbb  •  4 weeks ago  •  2 comments

By:   The Motley Fool (Yahoo Finance)

Why GM Stock Jumped 11% This Week
Earnings were even better than the market expected.

S E E D E D   C O N T E N T


Travis Hoium, The Motley FoolFri, Feb 2, 2024, 4:25 PM2 min readIn this article: 898cdbc6ceb7c323cbe814b3ac9ecd07

In a surprise to a lot of investors, General Motors (NYSE: GM) was one of the hottest auto stocks this week, rising as much as 11.8% before closing 11.4% higher for the week.

This wasn't a speculative move either. GM reported better-than-expected earnings for the fourth quarter and sees a strong year ahead in 2024.

GM's great quarter


GM reported a 0.3% decline in quarterly revenue to $43.0 billion while diluted earnings per share improved to $1.59, which both beat analyst estimates.

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What really impressed investors was 2024 guidance for $8 billion to $10 billion in adjusted auto free cash flow and earnings of $8.50 to $9.50 per share. This is despite the higher costs associated with new union contracts in Q4.

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At Cruise, GMs autonomous driving unit, the company said costs will come down $1 billion in 2024 as the company refocuses on launching in a single city before expanding further.

GM isn't in decline


Despite pulling back on some electric vehicle investments and launches, GM seems to be performing extremely well. The company is generating great cash flow and is now buying back debt at a rapid rate. The company spent $11.1 billion on buybacks in 2023, and management said they would continue buying back stock aggressively.

I think the decline of GM has been greatly exaggerated, and the company is on much better footing than the market thinks. People are still buying trucks and SUVs in large numbers, and GM is the leader in both markets. EVs may be the future, but trucks and SUVs are now, and that's good for GM's business.

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Travis Hoium has positions in General Motors. The Motley Fool recommends General Motors and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.

Why GM Stock Jumped 11% This Week was originally published by The Motley Fool


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JBB
Professor Principal
1  seeder  JBB    4 weeks ago

GM is as American as Chevrolet and apple pie...

 
 
 
Sparty On
Professor Principal
2  Sparty On    4 weeks ago

Seeds like this are confusing when on one hand the left is anti “greedy” corporation and on the other they are praising them like in this seed.

It speaks to the partisan psychosis involved here.

That said, I recently had to decide on buying out a lease or purchasing a new vehicle.    The market made my mind up for me.    Sticker prices is the best you could do.    Never have I paid close to sticker price for a vehicle.

Needless to say I bought out the lease of my 2020 Ram which i purchased at about 20% below sticker in 2019.  

Hooray Bidenomics.

 
 

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