Key Takeaways
- General Motors stock is up 16% in the past year, but all of that gain came before 2026, and the stock is down 1% this year since GM stopped raising its profit outlook.
- CEO Mary Barra says the stock is undervalued, and GM’s buyback record supports her.
- GM’s normalized net income was about the same in 2025 as in 2021, but normalized EPS rose 50% as buybacks cut the share count to 849 million by Sept. 30.
- GM gives its 2027 outlook in late January, and it needs to show profit growth despite roughly $2 billion of higher commodity costs.
General Motors (GM) stock is up 16% in the past year (through Tuesday’s close), and Chair and CEO Mary Barra thinks there’s more to come. As she told Jim Cramer on Mad Money on Oct. 12, “we do think the stock is undervalued.”
On Tuesday, GM said it will move its listing from the NYSE to Nasdaq on Nov. 17, which makes it eligible for the Nasdaq-100. Still, the whole year’s gain came before 2026: the stock is down 1% in 2026 (through Tuesday’s close).
Two guidance raises, then a pause
GM opened the year guiding to $13 billion to $15 billion of adjusted EBIT. It raised that range twice, to $14 billion to $16 billion by July.
In the third quarter, revenue rose 3% to $50.0 billion, adjusted EBIT jumped 22% to $4.1 billion, and adjusted EPS of $3.70 beat the $3.63 analysts expected. GM also raised its outlook for adjusted automotive free cash flow to $11.5 billion to $12.5 billion.
But it only narrowed its profit range, to $14.5 billion to $15.5 billion, and flagged about $2 billion of commodity, logistics and memory-chip costs this year. The stock fell 7% that day.
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849 million shares and shrinking
GM has put money behind Barra’s words. It finished January’s $6 billion buyback by the end of the third quarter, and its board approved a new $20 billion authorization.
Buybacks have cut GM’s diluted share count by about a third since 2021…
…and GM had 849 million shares outstanding on Sept. 30, down from 1.2 billion at the end of 2023.
All of GM’s per-share growth over that time came from the shrinking share count. Normalized net income was $10.3 billion in 2025, about the same as the $10.4 billion GM earned in 2021. Normalized EPS still rose 50%, to $10.60 from $7.07.
Wall Street expects more of the same. Consensus has normalized net income near $12 billion in each year from 2026 to 2028, while normalized EPS keeps climbing…
And the third quarter shouldn’t move those estimates much, since GM kept the midpoints of its 2026 profit and EPS ranges where they were.
What January has to show
The catch is costs. CFO Paul Jacobson put next year’s commodity headwind at roughly $2 billion at recent prices. On GM’s third-quarter call, he said GM “would need prices to come off of these levels” before it could count on growth in 2027.
Around 6x earnings, I’d buy more
Before Tuesday’s jump, GM traded at 5.5x forward earnings. That’s a bit below its five-year average of 5.8x and about half its late-2021 high of 10.8x.
(Tuesday’s gain puts it closer to 6x, right around that average.)
So GM has been cheap for years, buybacks and all, and the case for buying doesn’t need that to change. The $20 billion authorization equals nearly 30% of GM’s market value. Every share it retires at this multiple lifts earnings per share for the owners who stay.
Analysts trimmed their targets after the report, but the $101 consensus target still sits roughly a quarter above Tuesday’s close.
The risk is that GM is buying back stock near the top of the truck cycle. If profits shrink, those buybacks will look expensive.
My take: Barra has a point. At this multiple, GM can grow EPS without growing profit, and I’d buy more here.
The test comes in late January, when GM gives its 2027 outlook. A forecast for profit growth that absorbs the $2 billion cost hit would back Barra up. If growth still depends on cheaper steel and copper, expect the stock to stay stuck near 6x earnings.
So what is General Motors stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
