Latest news with #GeneralMotorsGM
Yahoo
5 days ago
- Automotive
- Yahoo
GM vs. TM: How Do These Legacy Giants Stack Up in the Auto Space?
General Motors GM and Toyota Motor TM are two of the biggest names in the global auto industry and fierce rivals in the U.S. market. GM often leads the pack as the top-selling automaker in the country, while Toyota usually comes in a close second. In 2024, GM sold over 2.7 million vehicles in the United States, up 4% year over year. Toyota wasn't far behind, delivering 2.33 million units, a 3.7% increase from 2023. Globally, Toyota holds a clear edge. The Japanese automaker sold 10.8 million vehicles worldwide last year, compared to GM's 6 million. Toyota's scale and steady performance are reflected in its market value—around $255 billion—while GM trades at just under $50 billion. Year to date, shares of Toyota have declined 1.7%, compared with GM's decline of 8%. The auto sector has lost 10% over the same timeframe. Image Source: Zacks Investment Research Let's take a closer look at their fundamentals, growth catalysts and looming risks to determine which automaker is a better choice for investors now. General Motors is holding its ground but cracks are starting to show. The automaker managed to beat earnings expectations once again in the last reported quarter—a sign of resilience—but the near-term outlook is getting cloudier. Tariff pressure under Trump's presidency forced GM to revise its full-year outlook. The company now expects adjusted EBIT of $10 billion to $12.5 billion, down sharply from its earlier range of $13.7 billion to $15.7 billion. Net income projections were cut as well. GM suspended its share buyback program after having $4.3 billion in repurchase capacity left at the end of the first quarter of 2025. That move has rattled some investors, raising questions about how well GM is positioned to absorb the tariff blow. The company is also vulnerable to supply chain disruptions. GM expects a $2 billion impact from South Korean operations alone, where vehicles like the Chevrolet Trailblazer and Buick Encore GX are built—models that made up nearly 18% of its first-quarter sales. Its reliance on manufacturing in Mexico and Canada adds another layer of uncertainty. Even as GM pushes forward on its electric vehicle ambitions, the payoff remains uncertain. The company was the second-largest EV seller in the United States last quarter, and Chevrolet is now the fastest-growing EV brand. It also managed to make its EV lineup "variable profit positive" by the end of 2024, which means it now covers basic production costs. Still, that's a long way from achieving healthy margins, and progress will take time. Heavy investment in EVs, battery tech, and software continues to eat into GM's free cash flow. The company has lowered its adjusted automotive free cash flow forecast to $7.5-$10 billion, down from $11-$13 billion. While GM does have a strong cash position—$20.7 billion at the end of the first quarter of 2025—its financial flexibility could tighten if global risks escalate further. GM's long-term vision remains intact, but the road ahead is looking bumpy. The Zacks Consensus Estimate for GM's 2025 sales and earnings implies a year-over-year decline of 5.3% and 12%, respectively. EPS estimates for GM have been revised downward over the past 60 days. Image Source: Zacks Investment Research Toyota continues to show why it's considered one of the most dependable players in the global auto space. The company topped earnings expectations in its last reported quarter and expects to grow both sales volumes and revenues in fiscal 2026 (ending on March 31, 2026). However, profits may come under pressure as new challenges emerge. Toyota forecasts a 21% drop in operating income for fiscal 2026. That's largely due to rising material costs, a stronger yen and the impact of Trump's tariffs. Higher vehicle prices could hurt consumer sentiment and weigh on demand, especially in key markets like the United States. On the bright side, Toyota expects to sell 9.8 million vehicles in fiscal 2026, up from 9.36 million in fiscal 2025. Including Lexus, total sales are projected to reach 10.4 million units. Electrified vehicles—including hybrids and plug-ins—are a major driver, with expected sales rising to 5.18 million units, up from 4.75 million last year. That momentum is reflected in revenue forecasts, with sales projected to rise slightly to ¥48.5 trillion in fiscal 2026. Toyota's hybrid-first strategy is clearly resonating with buyers. RAV4, America's top-selling SUV, is now available only as a hybrid or plug-in hybrid model starting in 2026. By ditching the gas-only version, Toyota is doubling down on efficient, accessible electrification—something that stands out as BEV adoption is expensive. Beyond hybrids, Toyota is also making big moves in hydrogen. It's focused on expanding commercial vehicle use and scaling hydrogen infrastructure to cut costs over time. Meanwhile, Toyota is keeping investors happy. It raised its annual dividend to 90 yen per share in fiscal 2025 and expects to increase it to 95 yen in fiscal 2026. With consistent dividend growth and a measured approach to electrification, Toyota remains a steady and strategic player in an uncertain auto landscape. The Zacks Consensus Estimate for TM's sales in fiscal 2026 implies 6% growth year over year. The consensus mark for EPS, however, implies a decline of 13.5% year over year. While fiscal 2026 estimates for TM have moved down over the past 60 days, fiscal 2027 estimates have moved up. Image Source: Zacks Investment Research Our Take: TM Over GM Both General Motors and Toyota are navigating a tough macro environment with tariffs and rising costs squeezing profitability. GM is making steady progress in EVs and holds a strong position in the U.S. market, but near-term challenges and reduced financial forecasts have clouded its outlook. Toyota, meanwhile, continues to flex its global scale, hybrid dominance, and disciplined strategy—even as profit growth stalls. Its steady top-line momentum, growing electrified sales, and dividend growth are appealing. While GM has potential, Toyota's fundamentals and strategy look stronger now. Toyota currently carries a Zacks Rank #3 (Hold), while GM carries a Zacks Rank of 5 (Strong Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Toyota Motor Corporation (TM) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Globe and Mail
05-05-2025
- Automotive
- Globe and Mail
GM vs. TSLA: Which Auto Giant is a Better Investment Option Now?
A fresh wave of auto tariffs is rattling the U.S. auto industry — this time targeting imported parts rather than fully assembled vehicles. While previous levies largely spared American-made cars, the new tariff on auto parts affects nearly every vehicle produced in the United States. Not one of the 10 million cars built in the country last year rolled off the line without some foreign components. With the implementation of the new duties, tens of billions in additional costs are looming over manufacturers, which will potentially be passed down to consumers in the form of higher prices. Already vulnerable to economic cycles, the auto industry now faces even greater uncertainty. In this environment, investors must be extra cautious. So, how do two of the sector's biggest names— General Motors GM and Tesla TSLA —stack up as investment opportunities amid these headwinds? Let's break down their fundamentals, growth catalysts and looming risks to determine which automaker offers the better bet right now. The Case for General Motors General Motors is the country's top-selling automaker, supported by strong demand for its popular pickups and SUVs. In its recently released first-quarter 2025 results, GM continued its streak of beating earnings expectations, showing resilience despite tough conditions. However, the company wouldn't be immune to the tariffs. Citing uncertainty, GM lowered its full-year guidance. It now expects adjusted EBIT between $10 billion and $12.5 billion, down from the earlier range of $13.7 billion to $15.7 billion. Net income forecasts were also trimmed to $8.2 billion–$10.1 billion from the previous $11.2 billion–$12.5 billion. Free cash flow expectations have dropped, too, and GM has paused its share buyback program until the full tariff impact is clearer. Earnings Estimates for GM Despite these near-term headwinds, GM's long-term story is intact, especially its shift toward electric vehicles. It was the second-largest EV seller in the United States last reported quarter, with Chevrolet emerging as the fastest-growing EV brand. Impressively, GM's EV lineup became "variable profit positive" by the end of 2024, meaning it now covers its production costs. The company aims to reduce those losses even further this year. Strategic partnerships with firms like Vianode, LG Chemical and Lithium Americas have strengthened GM's EV supply chain. Meanwhile, cost-cutting remains a priority. GM met its $2 billion cost reduction target in 2024 and is targeting an additional $1 billion in annual savings by exiting its robotaxi program. Financially, GM is in good shape. It ended the first quarter with $20.7 billion in cash and is seeing progress in its China restructuring, aiming to return to profitability there this year. In short, while GM faces near-term challenges, its strong ICE and EV portfolios, improving cost structure, and solid balance sheet support its long-term potential. The Case for Tesla Tesla, once seen as the gold standard in the electric vehicle world, is now facing a tough stretch. The company is dealing with falling deliveries across major markets, as competition heats up from legacy automakers and new EV entrants. Its brand image has also taken a hit. CEO Elon Musk's political involvement has distracted him from the company's core operations. In the first quarter of 2025, Tesla missed its earnings expectations. Musk recently said he would reduce his role in the U.S. government's Department of Government Efficiency (DOGE) and focus more on Tesla. But it's unclear whether this move can undo the damage already done. The company has been offering steep discounts to keep sales going, but that's putting pressure on its automotive profit margins. Amid the global tariff uncertainty and ongoing challenges in China, the company plans to revisit its 2025 delivery volume guidance in the next quarterly update. Earnings Estimates for TSLA One bright spot is Tesla's energy generation and storage segment. This part of the business is growing fast and is more profitable, but it's not enough to balance out the weakness in its EV division. Financially, Tesla is strong. As of March 31, 2025, the company had $37 billion in cash, up slightly from the previous quarter. Its long-term debt is low, with a debt-to-capital ratio of just 7. This gives it the flexibility to invest in new opportunities. Looking ahead, Tesla is betting big on self-driving technology. Musk plans to launch robotaxi services in Austin this June. The company is also working on its humanoid robot, Optimus, and a two-seat autonomous vehicle called the Cybercab, set for volume production in 2026. While these plans are exciting, they are still in early stages and come with execution risks. For now, Tesla's core business—selling electric cars—is under pressure. The company's future depends on its ability to deliver on ambitious new projects while stabilizing its existing operations. GM Looks Undervalued, TSLA Too Pricey Tesla is trading at a forward sales multiple of 8.75X, above its median of 7.72X over the last five years. Tesla has a Value Score of F. Meanwhile, General Motors has a Value Score of A, with its forward sales multiple at 0.25X, below its 5-year average of 0.32. Conclusion Both GM and Tesla are facing challenges right now. Tesla, once seen as the top name in EVs, is struggling with falling sales, shrinking profits and distractions from its CEO. While its future plans—like robotaxis and humanoid robots—sound exciting, they're still just promises at this stage. The core car business is clearly under pressure. GM, on the other hand, has its own issues, especially with tariffs and lowered guidance. But it's still holding up better. It continues to sell a lot of trucks and SUVs, and its EV push is gaining ground. In fact, GM's electric portfolio was near breakeven on variable profit in the last reported quarter. The company is also cutting costs and building strong partnerships to support its future goals. So, while both General Motors and Tesla are navigating an environment marked by economic uncertainty, rising tariffs and shifting consumer demand, GM may be the better pick for investors seeking a more balanced exposure to the auto sector right now. Tesla still has the bigger brand and bold vision, but GM currently offers more stability and a more grounded execution strategy. Tesla currently carries a Zacks Rank #5 (Strong Sell), while GM is #3 Ranked (Hold). You can see Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone. See Stocks Now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis Report This article originally published on Zacks Investment Research (
Yahoo
05-05-2025
- Automotive
- Yahoo
GM Trims Outlook, Halts Buyback Amid Tariffs: Sell the Stock Now?
General Motors GM has lowered its 2025 earnings forecast, warning that new U.S. auto tariffs could cost the company $4-$5 billion. The updated guidance, released yesterday, comes two days after the company released its first-quarter results and withdrew its previous outlook, which didn't take tariffs into account. It has also temporarily suspended the buyback of shares amid uncertainty. The move reflects rising pressure from global trade tensions, as Trump's tariffs target foreign-built vehicles and parts. GM's closest peer Ford F will release results next week and chances are high that it will also slash its 2025 view. Ford's previous outlook also didn't take into account tariffs and the company's CEO had already warned that tariff headwinds would cause a lot of chaos in the auto industry. U.S. motorcycle giant Harley-Davidson HOG has also withdrawn its guidance amid macroeconomic and tariff uncertainties. GM, which holds the title of the top-selling automaker in the United States, now expects lower profit, cash flow, and earnings compared to earlier projections. After this revised guidance, investors might be wondering if it's still worth holding onto the stock. Before we discuss that, let's take a look at the revised guidance and see how General Motors is positioning itself to weather the tariff storm. GM now expects adjusted EBIT in 2025 to range between $10 billion and $12.5 billion, down from its prior guidance of $13.7-$15.7 billion. Net income attributable to shareholders is expected to fall and be in the range of $8.2 billion to $10.1 billion compared with the earlier forecast of $11.2-$12.5 billion. Adjusted automotive free cash flow is also expected to be hit and is now projected in the range of $7.5-$10 billion, lower than $11-$13 billion guided earlier. One of the biggest contributors to the downward revision is a projected $2 billion business hit from South Korea. Vehicles like the Buick Encore GX, Buick Envista, Chevrolet Trailblazer and Chevrolet Trax are all assembled there and made up nearly 18% of GM's first-quarter vehicle sales. GM also cited lingering exposure to manufacturing facilities in Canada and Mexico. At the end of the first quarter of 2025, GM had $4.3 billion repurchase capacity remaining. But it has put a temporary freeze on additional repurchases until there is more clarity on the tariff impact. Analysts have started to make downward revisions to General Motors' EPS forecasts for 2025 and more cuts might be on the way. Image Source: Zacks Investment Research General Motors believes it can offset up to 30% of expected tariff-related costs through what it calls 'self-help initiatives,' which have been accounted for in the updated guidance. These initiatives include ramping up U.S.-based vehicle and battery module production and tightening compliance with USMCA sourcing requirements. CEO Mary Barra emphasized GM's multi-year shift toward a more U.S.-centric manufacturing footprint. Since 2019, the company has raised its U.S. direct purchases by 27%, with more than 80% of U.S.-built vehicle content now meeting USMCA standards. Simultaneously, GM has drastically reduced its reliance on China for direct materials to under 3%, aligning its supply chain with evolving trade dynamics. Year to date, shares of General Motors have declined 15%, outperforming the industry. The decline is also lower than Harley-Davidson, whose shares have plunged 23% so far in 2025. Meanwhile, Ford has gained 2.8% in the same timeframe. Image Source: Zacks Investment Research From a valuation standpoint, General Motors appears relatively undervalued. The stock trades at a forward price-to-sales (P/S) ratio of just 0.25, well below the industry average of 2.19. GM also boasts a Value Score of A, highlighting its attractive valuation. In comparison, Harley-Davidson trades at a P/S ratio of 0.69, while Ford's multiple matches GM's at 0.25. Image Source: Zacks Investment Research GM is facing some short-term challenges, but its long-term strategy remains on track. It is on course with its long-term electric vehicle (EV) strategy. The company was the #2 EV seller in the United States, with Chevrolet becoming the fastest-growing EV brand in the market. Importantly, GM's EV lineup turned 'variable profit positive' by late 2024, meaning it now covers its production costs. The company expects to cut EV-related losses further this year. Financially, GM remains in solid shape. It finished the first quarter with $20.7 billion in cash and cash equivalents. Its restructuring efforts in China have started to show progress, with the company targeting a return to profitability in those regions. The company remains profitable and committed to long-term growth, but near-term risks are clearly rising. Much will depend on how effectively GM can reduce the impact of tariffs and keep its costs under control. Yes, tariffs will put pressure on GM's margins this year and the recent halt in stock buybacks may shake investor confidence. Lowered earnings estimates could also weigh on sentiment in the near term. However, for long-term investors, GM's story is far from broken. The company is managing costs, advancing in EVs, and still generating strong cash flow. So, if you are thinking of selling the stock, it may be too soon. GM still has the fundamentals and the strategy to deliver over time. It currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. The Wall Street average target price for General Motors is $53.46, suggesting an 18.2% upside. Image Source: Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F) : Free Stock Analysis Report Harley-Davidson, Inc. (HOG) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Wall Street Journal
02-05-2025
- Automotive
- Wall Street Journal
GM to Eliminate Shift at Oshawa, Ontario, Plant Due to U.S. Trade Policy
OTTAWA—General Motors GM 0.22%increase; green up pointing triangle said it will eliminate one of the shifts at its plant in Oshawa, Ontario, citing U.S. trade policy. The Detroit-based automaker said it plans to manufacture more light and heavy-duty pickup trucks in Oshawa to meet Canadian demand. Presently, the Oshawa factory produces Chevrolet Silverado pickup trucks for the North American market. President Trump's 25% tariff on all imported cars has forced Detroit automakers, with operations in Canada and Mexico, to readjust their North American strategy.
Wall Street Journal
11-04-2025
- Automotive
- Wall Street Journal
General Motors to Suspend Production, Lay Off 500 at Electric Vehicle Plant in Ontario
General Motors GM -0.37%decrease; red down pointing triangle has temporary halted production of its BrightDrop electric delivery van and plans to lay off workers at its Ontario plant when it resumes scaled-back output, labor union Unifor said Friday. The Detroit automaker confirmed it is making operational and employment adjustments to 'balance inventory and align production schedules with current demand.' The company said it was committed to the future of BrightDrop and its CAMI plant, where production of the van and EV battery assembly would remain.
