DETROIT — General Motors is poised to unveil its earnings report for the first quarter on Tuesday morning, but market observers are likely to prioritize the company’s 2025 outlook amid the backdrop of President Donald Trump’s current auto tariffs.
The tariffs, which impose a 25% tax on imported vehicles, have contributed to increasing uncertainty within the automotive sector. This climate of instability has led several Wall Street analysts to revise downward their ratings on numerous automotive stocks, including GM.
Despite the long-term uncertainty, multiple analysts on Wall Street project that GM will surpass first-quarter expectations, as customers appear to be purchasing vehicles in anticipation of potential price hikes due to the tariffs.
According to average estimates compiled by LSEG, here’s what Wall Street is expecting:
- Earnings per share: $2.74 adjusted
- Revenue: $43.05 billion
Should these estimates be accurate, they would represent a slight revenue increase of 0.1% year-over-year and a 4.6% rise in adjusted earnings per share. In the first quarter of 2024, GM reported $43.01 billion in revenue, a net income attributable to stockholders of $2.98 billion, and adjusted earnings before interest and taxes amounting to $3.87 billion.
Historically, GM tends to boost its annual guidance during the first-quarter earnings reports, though it remains uncertain how effectively the company can counterbalance rising costs associated with the tariffs.
In February, GM CEO Mary Barra indicated the company anticipated mitigating as much as 50% of the potential tariffs imposed on imports from Canada and Mexico; however, there has been no subsequent announcement as to how the sector tariffs are affecting GM since their implementation.
The current auto tariffs of 25% apply not just to Canada and Mexico but also to other nations, including South Korea, from which GM imports vehicles.
The company’s 2025 guidance, released earlier this year, anticipates a net income attributable to stockholders in the range of $11.2 billion to $12.5 billion, equating to earnings per share of $11 to $12. Additionally, it projects adjusted earnings before interest and taxes between $13.7 billion and $15.7 billion, with adjusted automotive free cash flow projected to be between $11 billion and $13 billion.
Notably, Deutsche Bank, UBS, Barclays, and Bernstein are among the firms that have downgraded GM’s stock following the implementation of the auto tariffs that took effect on April 3.
Despite these downgrades, GM’s stock retains an overweight rating with an average price target set at $53.91 per share, based on estimates gathered by FactSet.
This is developing news. Please check back for additional updates.
