Here’s why GM outperforms its automakers on Wall Street

Detroit — general motors continues to beat Wall Street earnings estimates and its competitors, proving the company to be a standout among automakers this year.

The Detroit automaker’s stock rose 54.7% before the start of trading Monday, outperforming its traditional rivals. teslaa US electric vehicle startup lucid group and Rivian Automotive.

“You may not believe it yet, but it’s true that GM is still trucking,” BofA Securities analyst John Murphy said in October, after the automaker beat Wall Street’s third-quarter expectations. After that, he wrote in a note to investors.

GM has been doing so with the help of $12.4 billion in stock buybacks since last November, and the automaker said it will continue doing so for the foreseeable future. But it’s also proven to be operationally superior to its crosstown rivals. ford motor and Chrysler’s parent company Stellantisas well as peers in other sectors.

CEO and Chairman Mary Barra has been touting that kind of differentiation for years, but it has largely fallen on deaf ears. GM stock has almost always traded in lockstep with Ford due to its history and the cyclical nature of the auto industry.

But this year is different. Ford shares were down 10% as of Friday’s close. Others, including: ferrariEven Wall Street’s top-performing companies in the auto industry are lagging behind GM.

The electric car maker continues to lag GM, even though Tesla stock has soared more than 30% in the past week following President-elect Donald Trump’s victory in the U.S. presidential election. Tesla CEO Elon Musk campaigned heavily for Trump.

General Motors (GM): 54.7% Ferrari (RACE): 34.3% Tesla (TSLA): 29.3% Hyundai Motor* (HYMTF): 27.9%BYD Co., Ltd.* (BYDDF): 27.2%toyota motor vehicle (TM): 6.2% decrease Ford (F): 10% decreasehonda motor industry (HMC): 13.3% decrease Volkswagen* (VWAGY): 28.2% decreasenissan motors* (NSANY): 36.1% decreaselee auto (LI): -36.8% Stellantis (STLA): -42.5%Nio Co., Ltd. (NIO): 43.9% decrease Lucid (LCID): 47.5% decreaseRivian (RIVN): 54.9% decrease
*Over-the-counter stocks

Unlike many of its competitors, GM hasn’t lowered its 2024 outlook or missed Wall Street’s quarterly profit expectations. Instead, it has actually raised its key financial targets, even as it faces continued market challenges in the U.S. and its China operations are suffering hundreds of millions of dollars in losses due to increased competition.

GM has said it is cutting costs, but it hasn’t had to do so as aggressively as other automakers this year. Nissan, Volkswagen, and Stellantis are undergoing major restructurings that include layoffs, production cuts, and other cost-cutting measures.

GM’s stock has been lackluster for investors through most of Mr. Barra’s tenure, since he began leading the automaker in January 2014. The average closing price during her tenure was $38 per share, lower than the $40.02 closing price before she became CEO, according to FactSet data.

Cumulatively, the stock had risen 38.9% during Barra’s tenure as of Friday’s close. This is comparable to the S&P 500 index’s nearly 300% rise over the same period. GM’s all-time high stock price under Barra was $67.21 on January 5, 2022, as Barra laid out GM’s EV ambitions and growth plans.

It remains to be seen whether GM will be able to continue its strong performance next year, but GM has indicated that it expects its performance in 2025 to be on par with this year, hinting at a weak fourth quarter.

Barra reiterated GM’s position on Oct. 22, when discussing its quarterly results, that it will “continue to deliver results that strengthen our competitiveness and differentiate us from other companies in the industry.”

“We remain disciplined, resilient and intend to make adjustments where possible to continue to drive growth and profitability,” Barra said. “In the coming weeks and months, it will be clearer than ever how we intend to leverage the controllable tailwinds to deliver as strong a performance in 2025 as we had in 2024. It will be.”

The average weight on GM stock is overweight, with a price target of $59.85 per share, according to average Wall Street estimates compiled by FactSet.