Why General Motors Stock Is Sinking After Its Earnings Beat
General Motors stock is moving sharply lower Tuesday even after the automaker reported a fourth-quarter earnings beat. Here's what you need to know.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
General Motors (GM) stock is sinking Tuesday despite the auto company beating top- and bottom-line expectations for its fourth quarter and issuing a better-than-expected profit forecast for 2025.
In the three months ending December 31, GM's revenue increased 11% year over year to $47.7 billion. Its earnings per share (EPS) surged 54.8% to $1.92.
"We grew full-year revenue 9%, once again we led the U.S. market in total, retail, and fleet deliveries, we grew our market share, and we distanced ourselves from the industry's pricing, incentive, and inventory pressures," wrote General Motors CEO Mary Barra in her Q4 Letter to Shareholders. "We doubled our electric vehicle market share over the course of the year as we scaled production, and our portfolio became variable profit positive in the fourth quarter."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results topped analysts' expectations. Wall Street was anticipating revenue of $43.6 billion and earnings of $1.84 per share, according to Yahoo Finance.
For the full fiscal year, General Motors said it expects to achieve earnings in the range of $11 to $12 per share, representing growth of 3.8% to 13.2% from the $10.60 it earned in 2024. The forecast also came in well ahead of analysts' expectations for earnings of $10.76 per share.
"As we look to the year ahead, we will continue to allocate capital consistently and in a balanced manner, and our vehicle portfolio will continue to get stronger," Barra said. "For example, we will offer three stunning new Cadillac EVs – the ESCALADE IQ, OPTIQ and VISTIQ – and we're targeting further improvements in EV profitability as we continue to scale.”
Despite General Motors' strong results, the stock could be selling off today on concerns over President Donald Trump's recent commentary on potentially imposing blanket 25% tariffs on Canada and Mexico.
Is General Motors stock a buy, sell or hold?
General Motors has outperformed the broad market over the past 12 months, up 58% on a total return basis (price change plus dividends) vs the S&P 500's 25% gain. And Wall Street thinks the consumer discretionary stock has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for GM stock is $60.01, representing implied upside of nearly 20% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm CFRA Research raised its rating on GM stock to Hold from Sell and its price target to $55 from $45 following Tuesday's earnings release.
CFRA Research analyst Garrett Nelson notes that this was General Motors' 10th straight bottom-line beat and came "despite concerns that GM's year-over-year comparisons should be much more difficult in 2025 and the company could lose market share in the near- and intermediate-term due to its lack of hybrid vehicle offerings
However, he warns that "GM's automotive free cash flow should be about $2 billion lower in 2025, as capex remains significant."
Related Content
- Kiplinger's Earnings Calendar for This Week
- Analysts' Top S&P 500 Stocks to Buy Now
- Stock Picks That Billionaires Love
-
My First $1 Million: Retired Nuclear Plant Supervisor, 68Ever wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
How to Position Investments to Minimize Taxes for Your HeirsTo minimize your heirs' tax burden, focus on aligning your investment account types and assets with your estate plan, and pay attention to the impact of RMDs.
-
Are You 'Too Old' to Benefit From an Annuity?Probably not, even if you're in your 70s or 80s, but it depends on your circumstances and the kind of annuity you're considering.
-
Don't Bury Your Kids in Taxes: How to Position Your Investments to Help Create More Wealth for Them
To minimize your heirs' tax burden, focus on aligning your investment account types and assets with your estate plan, and pay attention to the impact of RMDs.
-
Are You 'Too Old' to Benefit From an Annuity?
Probably not, even if you're in your 70s or 80s, but it depends on your circumstances and the kind of annuity you're considering.
-
In Your 50s and Seeing Retirement in the Distance? What You Do Now Can Make a Significant ImpactThis is the perfect time to assess whether your retirement planning is on track and determine what steps you need to take if it's not.
-
Your Retirement Isn't Set in Stone, But It Can Be a Work of ArtSetting and forgetting your retirement plan will make it hard to cope with life's challenges. Instead, consider redrawing and refining your plan as you go.
-
The Bear Market Protocol: 3 Strategies to Consider in a Down MarketThe Bear Market Protocol: 3 Strategies for a Down Market From buying the dip to strategic Roth conversions, there are several ways to use a bear market to your advantage — once you get over the fear factor.
-
Dow Adds 1,206 Points to Top 50,000: Stock Market TodayThe S&P 500 and Nasdaq also had strong finishes to a volatile week, with beaten-down tech stocks outperforming.
-
The Best Precious Metals ETFs to Buy in 2026Precious metals ETFs provide a hedge against monetary debasement and exposure to industrial-related tailwinds from emerging markets.
-
For the 2% Club, the Guardrails Approach and the 4% Rule Do Not Work: Here's What Works InsteadFor retirees with a pension, traditional withdrawal rules could be too restrictive. You need a tailored income plan that is much more flexible and realistic.
