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These days, it’s good to be a major tech player. But it’s also good to be a legacy giant looking to get back on the radar if you’re General Motors (GM).
After slumping during the COVID-19 years, “without a doubt as far as the earnings and EBITDA and free cash flow, we’re going to be at record levels for GM,” Bank of America analyst John Murphy told Yahoo Finance Executive Editor Brian Sozzi during the Opening Bid podcast (see video or listen below).
“That’s the level that nobody thought would ever be consistently hit and it seems like they may be hitting that for the next few years.”
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That execution has led to GM earning the 2024 Yahoo Finance Surprise of the Year award.
Murphy praised veteran GM chair and CEO Mary Barra for her leadership over time. Barra, he said, recognized the “need to strengthen your core and make the core business that much stronger so you can fund the future.”
Founded in Flint, Mich., in 1908, GM is a member of the “Big Three” automakers alongside Ford (F) and Stellantis (STLA), formerly Chrysler.
GM stock hit a 52-week high of $61.24 in December and is up 47% year to date — far ahead of its Big Three peers.
Ford’s stock is down 15% in 2024, while Stellantis shares have dropped nearly 40%. Stellantis just axed its CEO amid poor execution.
Some strength for GM comes courtesy of its crossover vehicles and a more keen eye toward electric vehicle profits, Murphy said. What has surprised Barra this year is how EVs such as the Cadillac Lyriq have been embraced by consumers, she told Sozzi in an exclusive interview.
GM’s third quarter earnings topped Wall Street estimates on the top and bottom lines. Revenue reached $48.76 billion, beating estimates of $44.69 billion. Adjusted earnings per share came in at $2.96, surpassing the $2.43 expected.
The automaker also raised its full-year outlook for the third time this year.
“Importantly, when we get to calendar years ’27 and ’28, they have their pickups and large SUVs, which are an unbelievable franchise,” said Murphy, adding that no competitor has achieved this feat. “We may actually hit 18 million units in ’27 and ’28. I think there’s a tremendous amount of upside in the cycle,” he said.
It hasn’t all been rosy at GM, though. Earlier in the month, it announced a restructuring in China to the tune of $5 billion to shore up business woes in the ultra-competitive country. It also shared plans to shutter Cruise, its robotaxi division, by the first half of next year.
