General Motors: Potential Challenges Impacting Operating Margins, Shareholder Returns

Summary:

• In 3Q24, GM posted $48.75 billion and $3.06 billion in revenues and net income, representing a growth of 10.48% and -0.26% as compared to the same period last year.
• GM is likely to continue benefiting from the robust automotive market. Current indicators continue to show strong demand and will likely continue to pick up providing tailwinds to GM.
• However, GM faces multiple challenges such as the impending President Trump’s tariffs and escalating costs that may pressurize the company’s margins and affect shareholder returns.
• Despite factoring GM’s share reduction target, valuation analysis suggests that GM is currently now fairly priced. Current price provides no margin of safety to investors.

Introduction

General Motors (NYSE:GM) is one the the world’s leading companies specializing in the design, manufacturing, and sale of trucks, cars, SUVs, and crossovers. GM’s headquarter is in Detroit and currently employs more than 160k full-time employees. Automotive sales is the biggest contributor to

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