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General Motors Co GM

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Morningstar’s Analysis

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GM's Third Quarter Solid, Given Severe Headwinds From Lack of Chips and High Steel Prices

Analyst Note

| David Whiston, CFA, CPA, CFE |

It’s not surprising that General Motors’ third-quarter results were held back by rising steel costs and the chip shortage, but it still posted adjusted diluted EPS of $1.52 to beat Refinitiv consensus of $0.96. We are disappointed to see the stock fall about 5% after the release, but it appears that the fourth-quarter Refinitiv consensus for adjusted EBIT of $2.68 billion will not be met because GM is tracking for that metric to be as much as about $2 billion. We don’t see a reason to change our fair value estimate on fourth-quarter expectations falling short. Third-quarter EBIT also received a roughly $700 million net favorable impact from $1.9 billion of Bolt recall cost recoveries from supplier LG, but we calculate that GM would still have easily beaten consensus without that recovery.

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Company Profile

Business Description

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 remains the market leader in the U.S. with 17.3% share in 2020. GM Financial became the company's captive finance arm in October 2010 via the purchase of AmeriCredit.

Contact
300 Renaissance Center
Detroit, MI, 48265-3000
T +1 313 667-1500
Sector Consumer Cyclical
Industry Auto Manufacturers
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 155,000

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