GM: Shares Will Reflect Fair Value Amid Tariff Relief And EV Reset

Analysts have modestly lifted our General Motors fair value estimate to approximately $76 per share from about $74 per share, reflecting higher price targets supported by strong Q3 beat and raise dynamics, improving revenue growth expectations, and increased confidence in GM's ability to navigate tariffs and onshoring tailwinds into 2026.

Analyst Commentary

Street research following GM's Q3 beat and raise has skewed positive, with numerous upward revisions to price targets and earnings estimates. Bullish analysts see the quarter as validation of GM's ability to execute on cost controls, pricing, and tariff mitigation, while a smaller group of more cautious voices flag volume and margin risks into 2026.

Bullish Takeaways

• Bullish analysts have raised price targets materially, in several cases into the mid 70s to 100 range. They argue that the recent results and guidance upgrades are not yet fully reflected in valuation.
• Many see GM as well positioned through 2026 and cite improved visibility on tariffs, onshoring benefits, and opportunities to narrow EV losses. In their view, these factors support higher through-cycle margins and earnings power.
• Several firms highlight the Q3 beat and guidance raise as evidence of strong execution across both ICE and EV portfolios, with continued share gains and less pricing dilution than feared.
• Some large houses, including Goldman Sachs and JPMorgan peer groups, point to resilient U.S. auto demand, relatively benign pricing actions, and potential upside from lower interest rates and continued stock buybacks as additional supports for multiple expansion.

Bearish Takeaways

• Bearish analysts and those with more muted stances maintain lower price targets and Neutral or Underweight ratings. They argue that the stock already discounts much of the near term strength and that risk or reward is more balanced.
• There is concern that North American volumes could undershoot prior expectations into 2026, which would pressure EBIT relative to the now more optimistic Street trajectory.
• Some cautious voices remain focused on potential pressure from pricing or higher warranty costs and warn that strong recent results may not be sustainable if competitive intensity rises.
• Even where earnings forecasts sit above consensus, a few researchers flag the risk that consensus has moved too quickly and that any disappointment on execution, tariffs, or EV transition pace could weigh on the valuation from current levels.

What's in the News

• GM has instructed thousands of suppliers to phase China out of their parts and raw materials sourcing, accelerating a broader shift of its supply chain out of the country (Reuters).
• GM is cutting roughly 1,200 jobs at its Detroit all electric plant and about 1,250 positions across Ultium battery facilities in Ohio and Tennessee as it adjusts to weaker EV demand (Bloomberg, The Detroit News).
• The White House is preparing to extend for five years an arrangement that eases tariffs on imported auto parts, a potential multiyear cost benefit for GM and other U.S. automakers (Bloomberg).
• GM's early bet on U.S. rare earth magnet production is paying off, positioning it as the only major U.S. automaker with large direct supplies of American made magnets as China tightens export rules (Wall Street Journal).
• Senate Republicans plan January hearings scrutinizing auto safety technology mandates and rising vehicle prices. Detroit Three CEOs and a senior Tesla executive have been asked to testify, keeping regulatory and cost issues in focus for GM (Wall Street Journal).

Valuation Changes

• The fair value estimate has risen slightly, moving from approximately $74.15 per share to about $76.12 per share, reflecting modestly stronger long-term assumptions.
• The discount rate remains unchanged at 12.5 percent, indicating no shift in the assumed cost of capital or risk profile.
• Revenue growth has increased modestly, with the long-term growth assumption rising from about 1.19 percent to roughly 1.24 percent.
• The net profit margin is effectively unchanged, edging down only slightly from approximately 3.37 percent to about 3.37 percent on a rounded basis.
• The future P/E multiple has risen slightly, from roughly 12.39x to about 12.70x, implying a modest expansion in the valuation multiple applied to forward earnings.