General Motors (GM) Stock Forecast & Price Target

General Motors Co. reported a 2.6% year-over-year increase in net sales, amounting to $187.4 billion, buoyed by strong demand for its full-size pickups and SUVs along with initial revenue from new electric vehicle launches. The company also achieved a significant uplift in its technology-driven revenue sources, with its service offerings generating approximately $2 billion year-to-date and an increase in OnStar subscribers by 34%, highlighting the potential for ongoing growth in recurring revenue. Furthermore, GM's operating efficiency is underscored by an 11.6% year-over-year increase in EBITDAR, reaching $28.8 billion, with expectations for continued improvement, enhancing the overall financial health and outlook for the company.

General Motors Co. faces several fundamental challenges that contribute to a negative outlook on its stock, including potential profit and cash flow reductions due to a weaker macroeconomic environment and ongoing supply chain disruptions. The transition to electric vehicles (EVs) and autonomous vehicles (AVs) is projected to incur higher-than-expected costs, further exacerbating margin pressures, while the profitability of GM's technology initiatives remains uncertain with a wide range of potential outcomes. In addition, significant tariff-related costs, estimated between $4 billion to $5 billion, are expected to negatively impact earnings before interest and taxes (EBIT) and free cash flow, despite the company's efforts to adjust manufacturing and implement cost initiatives.