TLDR
- General Motors (GM) stock fell 1.3% on Wednesday, a day after a 7% drop on third-quarter earnings.
- GM posted $3.70 adjusted profit per share on $50.02 billion in revenue and approved a $20 billion buyback.
- EV sales fell 43% to 82,000 units through Q3, and GM wrote down more than $11 billion.
- Hands-off, eyes-off highway driving is planned for the Cadillac Escalade IQ in 2028.
- RBC, Barclays and Morgan Stanley cut targets, while Citi holds a $131 target.
General Motors (GM) stock fell 1.3% on Wednesday to trade near $76, based on the 41.9% upside tied to the $108 average target. The S&P 500 rose 0.6% on the day.
The drop came a day after a 7% slide on third-quarter earnings. Coming into Wednesday, the stock was already down about 5% for the year.
The results themselves looked solid. GM posted $3.70 in adjusted profit per share on $50.02 billion in revenue, up 2.9% from last year.
Revenue beat the $48.70 billion estimate. GM also approved a $20 billion buyback and kept its $0.18 quarterly dividend.
The company raised its 2026 adjusted automotive free cash flow outlook to $11.5 billion to $12.5 billion. The prior range was $9.5 billion to $11.5 billion.
Investors seem worried about 2027. Inflation is raising costs for automakers and weighing on demand for cars.
What GM Showed in New York
GM held an event in New Yorkās Meatpacking District on Wednesday. It was heavy on AI and self-driving demos, but the market was not won over.
EV sales fell 43% to 82,000 units through the third quarter. GM wrote down more than $11 billion in EV spending and sold stakes in battery plants to LG Energy Solution and Samsung SDI.
The company has spent $35 billion on electric technology and a 12-model lineup. Executives told Bloomberg a new mainstream electric SUV is planned within about three years.
GM says its new lithium manganese-rich batteries hold 33% more energy density than lithium iron phosphate packs. That works out to 20% more range per kilowatt-hour.
The next EV platform is expected to be 15% lighter, with 40% fewer drive unit parts. The new computing setup has 40 times the capacity and 30% less wiring.
Hands-off, eyes-off highway driving arrives on the Cadillac Escalade IQ in 2028. The 2027 Cadillac Lyriq will be the first car with OnStarās new AI assistant.
GM also says AI tools are cutting its nearly five-year development time in half. OnStar now has more than 12 million subscribers.
Analysts Weigh In
Several analysts trimmed targets after earnings. RBCās Tom Narayan cut his to $98 from $102 and kept an Outperform rating.
Barclaysā Dan Levy lowered his to $105 from $110. Morgan Stanleyās Andrew Percoco cut his to $95 from $101, and both kept Overweight ratings.
Gordon Haskettās Don Bilson called GMās valuation āoutrageously low.ā The stock trades at five times expected earnings, down from near seven at the start of the year.
Citiās Mike Ward keeps a Buy rating and a $131 target. He expects 8% to 10% North American auto margins and about $12 billion in annual free cash flow from 2026 to 2028.
GM carries a Strong Buy consensus, with 15 Buys and one Hold over the past three months. The average 12-month target is $108.
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