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22 Apr, 2025
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Will GM Stock Surpise On The Upside Following Q1?
@Source: forbes.com
SAN DIEGO, CALIFORNIA - APRIL 4: A GMC logo is displayed on a truck for sale at a CarMax dealership ... More on April 4, 2025 in San Diego, California. (Photo by Kevin Carter/Getty Images) Getty Images General Motors is scheduled to announce its earnings on Tuesday, April 29, 2025. Analysts project earnings of $2.65 per share on revenue of $43 billion, which is approximately flat compared to the prior year. However, there is a chance the results could exceed expectations. It's likely that customers accelerated vehicle purchases in March in anticipation of President Trump’s proposed import tariffs on automobiles. GM posted a 17% year-over-year increase in U.S. sales for Q1 2025, outpacing other major carmakers. Notably, the company recorded solid growth in full-size SUV sales, while electric vehicle sales also gained traction, capturing market share from competitors such as Tesla. Overall, GM’s forward guidance will be closely scrutinized, especially in light of the potential impact of tariffs. Just over half of the vehicles GM sells in the U.S. are produced domestically, which means the company remains vulnerable to higher costs on imported vehicles and foreign-made parts used in local manufacturing. GM currently has a market capitalization of $47 billion. Over the past twelve months, the company generated $187 billion in revenue, with $13 billion in operating profit and $6 billion in net income. For investors seeking potential upside with less volatility than individual stocks, the Trefis High-Quality portfolio could be a compelling option, having outperformed the S&P 500 with total returns exceeding 91% since inception. General Motors’ Historical Odds Of Positive Post-Earnings Return MORE FOR YOU NYT Mini Crossword Hints, Clues And Answers For Tuesday, April 22 Google Starts Scanning Your Photos—3 Billion Users Must Now Decide WWE Raw After WrestleMania Results, Winners And Grades On April 21, 2025 Here are some insights on one-day (1D) post-earnings stock movements: Across 20 earnings events over the past five years, GM recorded 9 positive and 11 negative one-day returns, equating to a 45% likelihood of a positive move. This probability rises to 50% when narrowing the dataset to the last three years. The median return for the 9 positive cases was 4.4%, while the 11 negative instances had a median return of -3.5%. Additional data on 5-Day (5D) and 21-Day (21D) returns following earnings announcements is summarized in the chart below. GM observed 1D, 5D, and 21D post-earnings return Correlation Between 1D, 5D, and 21D Historical Returns A potentially safer approach (depending on correlation strength) is to analyze the relationship between short- and medium-term post-earnings returns, identify the pair with the highest correlation, and trade accordingly. For instance, if 1D and 5D returns are most closely correlated, a trader may choose to go “long” for 5 days if the 1D post-earnings move is positive. Below is correlation data derived from both 5-year and 3-year histories. The 1D_5D metric refers to the correlation between one-day and five-day post-earnings returns. GM Correlation Between 1D, 5D, and 21D Historical Returns Is There Any Correlation With Peer Earnings? At times, peer performance may influence how a stock reacts post-earnings. This influence may even begin before earnings are released. The chart below compares GM’s post-earnings one-day return with the post-earnings one-day performance of peers that reported prior to GM. GM Correlation With Peer Earnings Preserve & Grow Wealth With Risk-Focused Quality Portfolios Learn more about the Trefis RV strategy, which has outperformed a combined benchmark of S&P 500, S&P MidCap, and Russell 2000, delivering strong investor returns. Alternatively, for more stable exposure than a single stock like General Motors, check out the High Quality portfolio, which has outperformed the S&P and returned over 91% since launch. Market Beating Portfolios | Rules-Based Wealth Editorial StandardsForbes Accolades
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