What To Expect From GM’s Q1 Earnings?

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General Motors (NYSE:GM) is expected to publish its Q1 2023 results on April 25 reporting on a quarter that saw the company’s U.S. deliveries see strong gains. We expect revenue for the quarter to come in at about $39.2 billion, slightly ahead of consensus estimates and up about 8% versus last year. We expect earnings to stand at about $1.72 per share, roughly in line with consensus estimates. See our analysis of GM Earnings Preview for a closer look at what to expect from GM stock for the quarter.

Although the macro picture is looking a bit more challenging for the automotive industry, due to rising interest rates, stricter credit standards, and concerns about the U.S. economy and consumer spending, GM’s delivery performance over Q1 was solid.  U.S. volumes rose by almost 18% from a year ago, to over 600,000 vehicles as semiconductor supply improved and supply chain issues eased, while sales to fleet operators picked up considerably.  The company delivered about 20,000 electric vehicles over the quarter and indicated that it was on track to sell about 50,000 EVs over the first half of this year. The company’s full-size pickups such as the Silverado and GMC Sierra continue to sell well, with combined sales rising by 9% year-over-year, outpacing rival Ford and its F-Series trucks. GM’s margins for the quarter could potentially be helped by stronger volume, rising market share, and cooling inflation.

GM stock has underperformed a bit this year, remaining roughly flat compared to the S&P 500 which remains up by about 8%. However, we think the stock is a good value at current levels of about $39 per share. GM trades at just under 6x the upper end of its projected 2023 adjusted earnings. GM also appears very optimistic about its long-term prospects, noting that it intends to double revenue to between $275 billion and $315 billion by 2030, driven in part by growth in EVs, software, and self-driving technology. The company also intends to expand margins to between 12% to 14%. GM is guiding for adjusted earnings per share of between $6 and $7 for 2023, with automotive free cash flow projected at between $5 billion to $7 billion, and it’s possible that this could be revised upward during the company’s Q1 earnings call. We remain bullish on GM stock with a $49 price estimate, which is considerably ahead of the current market price. See our analysis on General Motors Valuation: Expensive Or Cheap for more details on what’s driving our price estimate for GM. For more information on GM’s business model and revenue trends, check out our dashboard on General Motors Revenue: How GM Makes Money.

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Returns Apr 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 GM Return -9% 0% -4%
 S&P 500 Return 1% 8% 85%
 Trefis Multi-Strategy Portfolio 2% 10% 246%

[1] Month-to-date and year-to-date as of 4/23/2023
[2] Cumulative total returns since the end of 2016

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