Detroit-based General Motors Company (GM) designs, builds, and sells trucks, crossovers, cars, and automobile parts, and also provides software-enabled services and subscriptions. With a market cap of $51.1 billion, General Motors operates through GM North America, GM International, Cruise, and GM Financial segments. The auto manufacturer is expected to release its Q3 earnings before the market opens on Tuesday, Oct. 22.

Ahead of the event, analysts expect General Motors to report a profit of $2.54 per share, up 11.4% from $2.28 per share reported in the year-ago quarter. Moreover, the company has surpassed Wall Street’s EPS projections in each of the past four quarters. Its adjusted EPS for the last reported quarter grew by a massive 60.2% year over year to $3.06, exceeding the consensus estimates by 14.6%.

For fiscal 2024, analysts expect General Motors to report an EPS of $9.95, up 29.6% from $7.68 in fiscal 2023. In fiscal 2025, its EPS is expected to grow marginally to $9.96.

GM has gained 25.2% on a YTD basis, outpacing the S&P 500 Index’s ($SPX) 19.5% gains and the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 9.4% returns during the same time frame.

Although General Motors has performed well and observed earnings growth over the recent quarters while outperforming the S&P 500 on a YTD basis, its stock has observed a notable downturn recently. GM stock prices have dropped over 7% over the past month as it has been downgraded by several analysts recently.

GM shares fell 1.7% after Bernstein analyst Daniel Roeska downgraded GM from “Outperform” to “Market Perform” on Sep. 23 due to concerns over inventory build-up in the U.S., which will lead to pricing discounts in 2025, impacting the profitability of auto manufacturers.

GM stock fell further 4.9% on Sep. 25 after Morgan Stanley (MS) analyst Adam Jonas downgraded the stock from an “Equal-Weight” to an “Underweight” rating and lowered the price target from $47 to $42, citing a challenging market environment marked by falling prices and growing competitive threats, particularly from Chinese automakers.

The consensus opinion on GM stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 23 analysts covering the stock, 11 recommend “Strong Buy,” one advises “Moderate Buy,” eight suggest “Hold,” and three advocate “Strong Sell” rating.

The mean price target of $55.72 suggests a potential upside of 23.9% from current price levels.

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On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.