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General Motors Co GM

Morningstar Rating
$40.63 +0.45 (1.12%)
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Company Report

GM Is Aggressively Cost-Cutting to Stay Competitive Against Fierce Global Competition

We see General Motors with a competitive lineup in all segments it competes in, combined with a reduced cost base ($2 billion more in cuts across 2023-24), finally enabling it to have the scale to match its size. We think GM's earnings potential is excellent because the company has a healthy North American unit and a nearly mature finance arm with GM Financial. Moving hourly workers' retiree healthcare to a separate fund and closing plants drastically lowered GM North America's breakeven point to U.S. industry sales of about 10 million-11 million vehicles, assuming 18%-19% share. We expect more scale to come from GM moving its production onto vehicle sets over the next few years and a joint venture making EV batteries for even more flexibility and scale.

Price vs Fair Value

GM is trading within a range we consider fairly valued.
Price
$40.63
Fair Value
$94.00
Uncertainty
High
1-Star Price
$824.50
5-Star Price
$66.10
Economic Moat
Mywqz
Capital Allocation
Kbyzvdnz

Bulls Say, Bears Say

Bulls

GMNA's breakeven point of about 10 million-11 million units is drastically lower than it was under old GM.

Bears

GM may have to see a U.S. recession to prove it can do much better than old GM before the market will award the stock a higher P/E multiple. The recession came in 2020, and may again in 2024 or 2025, but the P/E multiple well after the downturn is uncertain.

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News

Trading Information

Previous Close Price
$40.18
Day Range
$40.0541.08
52-Week Range
$26.3041.35
Bid/Ask
$40.66 / $40.80
Market Cap
$46.90 Bil
Volume/Avg
15.7 Mil / 19.8 Mil

Key Statistics

Price/Earnings (Normalized)
5.32
Price/Sales
0.32
Dividend Yield (Trailing)
0.89%
Dividend Yield (Forward)
1.18%
Total Yield
24.58%

Company Profile

General Motors Co. emerged from the bankruptcy of General Motors Corp. (old GM) in July 2009. GM has eight brands and operates under four segments: GM North America, GM International, Cruise, and GM Financial. The United States now has four brands instead of eight under old GM. The company regained its U.S. market share leader crown in 2022, after losing it to Toyota due to the chip shortage in 2021. 2023's share was 16.5%. GM's Cruise autonomous vehicle arm has previously done driverless geofenced AV robotaxi services in San Francisco and other cities but stopped in late 2023 after an accident. It should restart in at least one city in 2024. GM owns over 80% of Cruise. GM Financial became the company's captive finance arm in October 2010 via the purchase of AmeriCredit.
Sector
Consumer Cyclical
Industry
Auto Manufacturers
Stock Style Box
Mid Value
Total Number of Employees
163,000

Competitors

Valuation

Metric
GM
MBGAF
F
Price/Earnings (Normalized)
5.325.346.06
Price/Book Value
0.760.881.15
Price/Sales
0.320.510.28
Price/Cash Flow
2.913.723.61
Price/Earnings
GM
MBGAF
F

Financial Strength

Metric
GM
MBGAF
F
Quick Ratio
0.830.831.01
Current Ratio
1.081.241.20
Interest Coverage
11.2062.152.82
Quick Ratio
GM
MBGAF
F

Profitability

Metric
GM
MBGAF
F
Return on Assets (Normalized)
3.86%5.98%3.08%
Return on Equity (Normalized)
15.10%17.96%18.80%
Return on Invested Capital (Normalized)
5.38%8.72%4.23%
Return on Assets
GM
MBGAF
F
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Auto Manufacturers Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
TSLA
Tesla IncXntbzf$643.5 Bil
TM
Toyota Motor Corp ADRHpyp$319.8 Bil
MBGAF
Mercedes-Benz Group AGZbqnck$83.8 Bil
STLA
Stellantis NVPmfnc$79.1 Bil
BMWYY
Bayerische Motoren Werke AG ADRGnqstkl$77.0 Bil
RACE
Ferrari NVVgdz$76.1 Bil
VWAGY
Volkswagen AG ADRPvpvh$74.1 Bil
VWAPY
Volkswagen AG ADRCqrcv$74.1 Bil
HMC
Honda Motor Co Ltd ADRKbzvj$57.2 Bil
F
Ford Motor CoBjvq$48.9 Bil

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