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General Motors (GM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

General Motors (GM) closed the most recent trading day at $39.36, moving +0.38% from the previous trading session. This change outpaced the S&P 500's 0.02% gain on the day. At the same time, the Dow added 0.1%, and the tech-heavy Nasdaq gained 0.17%.

Coming into today, shares of the automaker had gained 8.86% in the past month. In that same time, the Auto-Tires-Trucks sector gained 4.7%, while the S&P 500 gained 4.82%.

GM will be looking to display strength as it nears its next earnings release, which is expected to be August 1, 2019. The company is expected to report EPS of $1.42, down 21.55% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $35.71 billion, down 2.86% from the prior-year quarter.

GM's full-year Zacks Consensus Estimates are calling for earnings of $6.57 per share and revenue of $145.86 billion. These results would represent year-over-year changes of +0.46% and -0.81%, respectively.

It is also important to note the recent changes to analyst estimates for GM. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.83% lower. GM is currently a Zacks Rank #3 (Hold).

Digging into valuation, GM currently has a Forward P/E ratio of 5.97. This valuation marks a discount compared to its industry's average Forward P/E of 11.44.

It is also worth noting that GM currently has a PEG ratio of 0.67. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GM's industry had an average PEG ratio of 1.39 as of yesterday's close.

The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 86, putting it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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