With the help of double-digit profit growth, an upbeat outlook, and an attractive capital return profile, General Motors’ (GM) shares set a new all-time high on Tuesday and secured the automaker’s place as the top auto brand in the U.S.
“GM continues to navigate this difficult environment [of tariffs and EV restructuring] flawlessly to deliver strong bottom-line results with significant cash flow generation,” said Wedbush’s Dan Ives, noting GM’s gains in the company’s software and services business, supply chain efficiencies, and capital return to shareholders.
Fueled by healthy sales for its gas-powered vehicles and solid performance of its core businesses, GM (GM) beat on both the top- and bottom-line despite a 5% decline in total revenue.
The company also said it was increasing its quarterly dividend by 20%, buying back $6B in stock, and set FY25 profit guidance above expectations, the combination of which led analysts to reiterate their Buy rating on the stock.
“In our view, GM’s ability to generate EBIT margin from North American auto operations of 8-10% and free cash flow of $9B to $11B in 2026, despite ongoing tariff and [battery electric vehicle] headwinds are the positives supporting our Buy rating,” said Citi Research analyst Michael Ward.
While the stock continues to outperform the S&P 500 (now at 7K), GM (GM) has further upside potential with Seeking Alpha analyst The Asian Investor even considering the stock “undervalued” as the “increased dividend makes the stock more appealing to investors from a capital return perspective.”
Agrees TD Cowen’s Itay Michaeli, who predicts GM’s (GM) share price will climb to $122 on a “compelling go-forward risk/reward” and the potential for EBIT to reach $16B next year thanks to incremental truck capacity.
To drive this ambitious effort is GM’s (GM) restructuring of its supply chain to mitigate tariffs, right-sizing its EV business, increased focus on ICE business, SuperCruise growth, and momentum in its services business (parts, fleet management, GM Energy).
“Despite negative special items affecting GM—such as earnings-reducing charges related to the restructuring of its EV division—the automaker remained widely profitable in FY25,” the Asian Investor added.
During the company’s earnings call with analysts, CEO Mary Barra offered assurance that to ensure profitability, the company will continue to invest in EVs, albeit, “at much lower levels.”
“We know EV drivers don’t often go back to ICE, so we’ll continue executing our plan to dramatically reduce costs and be well positioned for the future.”
The company is also investing in robotics to improve manufacturing quality and lower costs and is building advanced technology for eyes-off and hands-off in its 2028 Cadillac Escalade IQ.
“We believe we have everything we need to deliver a safe, reliable, and highly capable system that customers will embrace,” Barra added on the call.
Despite tariff headwinds and EV struggles, General Motors (GM) remains a Buy among both Wall Street analysts and Seeking Alpha authors. Additionally, Seeking Alpha’s Quant rating views GM (GM) as a Strong Buy with a nearly perfect quant score.
Although shares are surrendering some of Tuesday’s gains, GM (GM) stock continues to linger near its record high.