General Motors' earnings have exceeded expectations this year, including escalating labor expenses from union contracts signed last year, elevated interest rates for car purchasers, and persistent losses in its electric vehicle (EV) division.
General Motors EV Division Outlook
General Motors (NYSE: GM) expects its North American electric vehicle (EV) division to recover in the latter part of the year, propelled by positive projections and strong consumer demand for conventional gasoline-powered automobiles. As a result of this optimistic perspective, the organization has revised its earnings forecast for the current fiscal year upwards.
The possible profitability of the electric vehicle (EV) sector represents a noteworthy achievement for General Motors (GM), which has encountered challenges in matching the profitability of its hybrid and conventional counterparts. GM maintains a positive outlook regarding the future profitability of its electric vehicle (EV) portfolio, anticipating an even more robust performance through 2025, notwithstanding a deceleration in domestic EV demand.
GM Quarterly Earnings Outlook
Although General Motors (GM) disclosed a marginal decline in adjusted net income compared to the preceding year, an increase in earnings per share of $10 billion due to a share repurchase program and a reduction in outstanding shares surpassed analysts' expectations. Moreover, revenue surpassed projections despite a marginal decrease in vehicle sales resulting from a strategic transition towards retail sales instead of fleet sales.
Additionally, GM provided revised guidance on earnings before interest and taxation and increased its full-year earnings forecast, which bolstered investor confidence and led to a 4% surge in premarket trading.
General Motors Business Threat
Concerns remain, however, regarding the waning demand for electric vehicles, as Tesla's recent sales decline and workforce reduction demonstrate. GM is dedicated to its electric vehicle (EV) strategy, emphasizing robust retail demand and strategic forethought when implementing production adjustments.
The automotive sector has benefited from restricted raw material supplies, which have limited production but sustained record-high automobile prices. As a result of the relaxation of these constraints, GM expects a moderate decrease in average pricing. However, this trend has not yet been reflected in sustained consumer demand.
GM Stock Forecast Technical Analysis
In the daily chart of General Motors Stock (GM), the overall market momentum is bullish, whereas the most recent price shows a bullish continuation momentum from the descending channel breakout.
According to the Bollinger Bands Indicator, the recent bullish rebound from the mid-Bollinger Bands suggests an upward possibility in the coming days. Moreover, the 100-day Simple Moving Average line is below the current price with a bullish slope.
Based on the current market structure, the GM stock price has a higher possibility of extending the upward pressure, where the main aim is to test the 161.8% Fibonacci Extension level (48.62).
On the other hand, an immediate bearish pressure with a daily candle below the lower Bollinger Bands could lower the price toward the 37.57 level before forming another bulling possibility.
