Bull of the Day: General Motors (GM)

General Motors GM has made the case for being one of the best value stocks to consider, as the iconic automaker dispels the perception that it won’t be able to sustain its dominance in an increasingly competitive and innovative auto industry.

Trading near a fresh 52-week and all-time high of $77 a share, GM stock has been performing exceptionally well thanks to strong financial results, aggressive share buybacks, restructuring successes in China, and investor optimism around its product lineup and EV investments.

Even better is that despite soaring +40% year to date, GM stock is still trading at just 7X forward earnings and at less than 1X forward sales.  

No.2 Domestic EV Seller

At the core of the rally and high sentiment for GM stock is that General Motors has emerged as a serious challenger to Tesla TSLA in the domestic EV market.

Solidifying its spot as the second-leading EV seller, General Motors' EV sales in the U.S. have already surged 105% this year to over 144,000 units sold. Notably, this has been led by its Chevrolet Equinox EV, with over 25,000 units sold, making it the best-selling non-Tesla EV in the U.S.

China Restructuring & Rare Earth Venture

Widely recognized for its effective management, GM has successfully restructured its business operations in China, improving efficiency and better positioning itself in one of the world’s largest auto markets.

To do so, GM has streamlined its product lineup, focusing on profitable models in China and reducing exposure to weaker segments. This included the shut down of its factory in Shenyang that produced Buick GL8 minivans and Chevrolet Tracker SUVs, along with writing down the value of equity stakes in its Chinese ventures by $2.6-$2.9 billion.

Still, despite the write-down and restructuring charges of $2.7 billion, GM is ultimately cutting costs and overcapacity to free up resources for EVs and autonomous vehicle production, not only in China but in its stronger North America market.

Furthermore, an underlying catalyst in regard to enthusiasm for GM stock is that General Motors has a rather unique position in the U.S. government’s bid to protect and increase rare earth mineral production. With Lithium Americas LAC being a player at the center of the rare earth stocks trade, it’s noteworthy that the mining company’s Thacker Pass project in Nevada is a joint venture with General Motors and is expected to become one of the largest sources of lithium in North America. Making the potential outcome of the project more optimal is that the U.S. government has taken a 5% stake in Lithium Americas, with lithium being essential for electric vehicle production and other technologies. 

Positive EPS Revisions

Correlating with a strong buy rating and suggesting even more upside in GM stock, fiscal 2025 and FY26 EPS revisions have continued to trend higher over the last 60 days, rising more than 1% and 2% in the last month, respectively. (Shown below)

This comes as GM has exceeded the Zacks EPS Consensus for 13 consecutive quarters. Most recently crushing Q3 earnings expectations by nearly 23% in October, GM posted quarterly EPS of $2.80 compared to estimates of $2.28.  

Following a multi-year peak, GM’s annual EPS is now expected to dip 2% in FY25 but is projected to rebound and increase 11% in FY26 to $11.51.

GM Dividend & Share Buybacks

After halting its dividend due to precautionary reasons during the pandemic, GM has raised its dividend by 25% in 2025, continuing a streak of increases for four consecutive years. Also signaling confidence in its financial strength, this coincides with a $6 billion share repurchase plan, which was resumed in July as uncertainties surrounding President Trump’s Liberation Day tariffs have faded.

Conclusion & Final Thoughts

Much credit has to be given to GM’s investments in EVs and autonomous driving through its subsidiary Cruise, which is serving as the next phase of the company’s growth, and may be boosted by the intriguing Thacker Pass project.

The days of GM’s “boring” stock performance are in the past, as several catalysts are working in the automaker's favor right now. In addition to its strong buy rating, GM checks an overall “A” Zacks Style Scores grade for the combination of Value, Growth, and Momentum.

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This article originally published on Zacks Investment Research (zacks.com).

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