Will General Motors Stock Rise After Q4 Results?

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General Motors

General Motors’ stock (NYSE: GM) is scheduled to report its fiscal Q4 2021 results on Tuesday, February 1. We expect GM to beat the consensus estimates for revenues and earnings. The company has reported better than expected earnings figures in each of the last four quarters while revenue was better than market estimates in two of the last four quarters. The Automotive sector is recovering from the pandemic, but the global shortage of semiconductor chips is affecting production across the world

Our forecast indicates that GM’s valuation is $73 per share, which is 40% above the current market price of $52. Look at our interactive dashboard analysis on GM’s earnings preview: What To Expect in Q4? for more details. 

(1) Revenues expected to be ahead of consensus estimates 

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GM’s revenues for full-year 2020 were $123 billion – down 11% y-o-y, as the Coronavirus pandemic led to de-growth in the automobile sector. In the first nine months of FY 2021 GM revenue recovered to $93.4 billion compared to $85 billion in the same period of 2020. Trefis estimates GM’s fiscal Q4 2021 revenues to be around $35.01 billion, above the $33.95 billion consensus estimate. Our dashboard on GM’s revenues offers more details on the company’s operating segments along with our forecast for the next two years.

(2) EPS likely to edge above the consensus estimates

GM’s Q4 2021 earnings per share (EPS) is expected to be $0.96 per Trefis analysis, just above the consensus estimate of $0.95. The company’s net income margin rose slightly in 2020, which we expect to continue in 2021. The removal of lockdowns and steady growth in the rate of vaccination has contributed to a revival in demand across sectors. Altogether, the company is likely to report an EPS of around $6.58 in FY2021.

(3) Stock price estimate 40% above the current market price

Going by our GM’s valuation, with an EPS estimate of around $6.65 in FY 2022 and a P/E multiple of 11, translates into a price of $73, which is 40% above the current market price of $52.

Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year

 

Check out how GM’s Peers fare on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

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 Returns Jan 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 GM Return -12% -12% 48%
 S&P 500 Return -9% -9% 93%
 Trefis MS Portfolio Return -14% -14% 242%

[1] Month-to-date and year-to-date as of 1/27/2022
[2] Cumulative total returns since the end of 2016

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