Several analysts have raised their price target for General Motors (GM-1.73%) stock after the company easily outperformed Wall Street's expectations -- again -- and raised its full-year guidance.
The Detroit automaker now expects adjusted earnings of between $14 billion and $15 billion, up from its prior forecast of between $13 billion and $15 billion and its initial guidance that called for a maximum of $14 billion. Net income for the July to September period came in at $3.3 billion, 28% greater than analysts had expected and a slight gain compared to the same period in 2023.
"General Motors delivered a Juan Soto-like quarter with third quarter results coming in very strong," Wedbush Securities analyst Dan Ives said in a note Wednesday, comparing the automaker to the New York Yankees outfielder. Ives added that GM's "mojo is back," raising his price target to $60 per share from $55 per share and reiterating an outperform rating.
Analysts at J.P. Morgan (JPM-0.18%) agreed, noting that the company has beaten Wall Street's consensus for adjusted earnings by an average of 11% over the past 10 quarters. The analysts, led by Ryan Brinkman, also raised its price target to $70 per share from $64 per share and reiterated an overweight rating, pointing to the earnings bear and a recent move to accelerate share buybacks.
Deutsche Bank (DB-1.37%) analysts raised their price target to $56 per share from $53 per share, while maintaining a hold rating, likewise citing the stock buyback plans. Barclays (BCS-2.47%) also boosted its target to $70 per share from $64 per share, while highlighting the buybacks.
In June, the automaker approved a $6 billion stock buyback as it closed a $10 billion plan. GM's share count fell by 300 million through the end of last quarter, landing at 1.1 billion shares in total.
GM Chief Financial Officer Paul Jacobson on Tuesday said the company expects to reduce its number of shares to 1 billion in total, which would require buying back about 120 million shares. The automaker thinks it can get to that point by early 2025.
"We believe buying back shares at a depressed valuation represents a great opportunity," Jacobson explained during an event earlier this month. "We expect to consistently return excess capital back to shareholders moving forward."
Analysts noted that GM's stronger than expected quarter had an unusually profound effect on the stock price, sending shares up as much as 8% on Tuesday. The stock is down almost 2% in trading Wednesday.
Despite the company's performance, and advancements with electric vehicles, its third-quarter report wasn't all good news.
GM took a $137 million hit in China, where the automaker is attempting to restructure its joint venture with SAIC Motor amid a series of losses. In June, SAIC-GM cut production by 70% and delivered 26,000 vehicles, or 50% fewer than a year prior, according to Automotive News. The company also reported an 88.2% drop in adjusted earnings in other international markets.
GM lost $383 million on its Cruise autonomous vehicle unit during the third quarter. Over the last nine months, Cruise has cost the automaker more than $1.3 billion.