Sporting a Zacks Rank #1 (Strong Buy) General Motors (GM) lands the Bull of the Day as there could be a nice amount of upside for the auto giant from its current levels.
Trading around $33 per share, General Motors stock is 24% from its 52-week highs with the company’s outlook more refreshing for investors at the moment.
To that point, General Motors was able to beat its top and bottom-line first-quarter expectations last Tuesday and raised its guidance in key areas. Driven by strong customer demand and increased operating efficiency, General Motors said it led the U.S. auto industry in retail and fleet deliveries, commercial deliveries, and truck sales.
This resulted in General Motors blasting Q1 earnings expectations by 35% with EPS at $2.21 per share compared to estimates of $1.64 per share. Year over year Q1 earnings were up 6% with sales jumping 11% from the prior year quarter at $39.98 billion. First-quarter sales also beat top-line estimates by 3%.
EPS Revisions & EV Presence
Aforementioned, General Motors also raised its outlook during its quarterly report and now expects fiscal 2023 EPS between $6.35 -$7.35 per share ($11 billion-$13 billion) and up from previous guidance of $6-$7 per share ($10.5 billion- $12.5 billion).
In correlation, earnings estimate revisions have climbed for General Motors over the last week and this is a great sign GM stock could start rising. Fiscal 2023 earnings estimates increased 5% last week and have now gone up 14% over the last quarter. Plus, FY24 EPS estimates have continued to trend higher as well.
More importantly, General Motors is starting to put an end to fears that Tesla (TSLA) and other EV companies would diminish its presence in the auto industry. With an electric vehicle expansion of its own, General Motors delivered 20,000 EVs during the first quarter.
This was a quarterly record and almost doubled Ford’s (F) 10,866 EV deliveries with General Motors surpassing its long-term rival for the #2 spot in the U.S. market share behind Tesla. General Motors said it increased its EV market share by 8% during Q1 to surpass Ford, and unlike Tesla will not cut prices and dip into profits which came as a delight to investors.
Great Value
With earnings estimates on the rise, General Motors’ price-to-earnings valuation is very attractive at just 4.9X forward earnings. This is nicely beneath the industry average of 10.5X and the S&P 500’s 19.1X. Even better, General Motors stock trades 77% below its decade-long high of 22.8X and at a 22% discount to the median of 6.7X.
General Motors’ cash flow is also attractive with the company raising its guidance for adjusted automotive free cash flow from expectations of $5 billion-$7 billion to $5.5 billion-$7.5 billion. Even better, when looking at General Motors’ price-to-cash flow its stock appears to have strong value right now.
With a lower P/CF number being desired many professional investors typically prefer this valuation metric because cash is harder to manipulate on the income statement and bolsters the financial health of a company.
At 2.9X, General Motors P/CF is intriguingly below the industry average of 9.2X and the benchmark’s 16.5X.
Takeaway
Now appears to be an opportunistic time to buy General Motors stock with its attractive expansion in the EV market and the company offering good value to investors.
This is reason to believe there could be a considerable amount of upside in GM shares which sport an overall “A” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum in addition to its Zacks Rank #1 (Strong Buy).
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Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
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Sporting a Zacks Rank #1 (Strong Buy) General Motors (GM) lands the Bull of the Day as there could be a nice amount of upside for the auto giant from its current levels.
Trading around $33 per share, General Motors stock is 24% from its 52-week highs with the company’s outlook more refreshing for investors at the moment.
To that point, General Motors was able to beat its top and bottom-line first-quarter expectations last Tuesday and raised its guidance in key areas. Driven by strong customer demand and increased operating efficiency, General Motors said it led the U.S. auto industry in retail and fleet deliveries, commercial deliveries, and truck sales.
This resulted in General Motors blasting Q1 earnings expectations by 35% with EPS at $2.21 per share compared to estimates of $1.64 per share. Year over year Q1 earnings were up 6% with sales jumping 11% from the prior year quarter at $39.98 billion. First-quarter sales also beat top-line estimates by 3%.
EPS Revisions & EV Presence
Aforementioned, General Motors also raised its outlook during its quarterly report and now expects fiscal 2023 EPS between $6.35 -$7.35 per share ($11 billion-$13 billion) and up from previous guidance of $6-$7 per share ($10.5 billion- $12.5 billion).
In correlation, earnings estimate revisions have climbed for General Motors over the last week and this is a great sign GM stock could start rising. Fiscal 2023 earnings estimates increased 5% last week and have now gone up 14% over the last quarter. Plus, FY24 EPS estimates have continued to trend higher as well.
More importantly, General Motors is starting to put an end to fears that Tesla (TSLA) and other EV companies would diminish its presence in the auto industry. With an electric vehicle expansion of its own, General Motors delivered 20,000 EVs during the first quarter.
This was a quarterly record and almost doubled Ford’s (F) 10,866 EV deliveries with General Motors surpassing its long-term rival for the #2 spot in the U.S. market share behind Tesla. General Motors said it increased its EV market share by 8% during Q1 to surpass Ford, and unlike Tesla will not cut prices and dip into profits which came as a delight to investors.
Great Value
With earnings estimates on the rise, General Motors’ price-to-earnings valuation is very attractive at just 4.9X forward earnings. This is nicely beneath the industry average of 10.5X and the S&P 500’s 19.1X. Even better, General Motors stock trades 77% below its decade-long high of 22.8X and at a 22% discount to the median of 6.7X.
General Motors’ cash flow is also attractive with the company raising its guidance for adjusted automotive free cash flow from expectations of $5 billion-$7 billion to $5.5 billion-$7.5 billion. Even better, when looking at General Motors’ price-to-cash flow its stock appears to have strong value right now.
With a lower P/CF number being desired many professional investors typically prefer this valuation metric because cash is harder to manipulate on the income statement and bolsters the financial health of a company.
At 2.9X, General Motors P/CF is intriguingly below the industry average of 9.2X and the benchmark’s 16.5X.
Takeaway
Now appears to be an opportunistic time to buy General Motors stock with its attractive expansion in the EV market and the company offering good value to investors.
This is reason to believe there could be a considerable amount of upside in GM shares which sport an overall “A” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum in addition to its Zacks Rank #1 (Strong Buy).
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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