Key Stats
- Current Price: ~$79
- Q1 2026 Revenue: $43.6B, down ~1% YoY
- Q1 2026 Adjusted EPS: $3.70, up 33% YoY (from $2.78 in Q1 2025)
- Q1 2026 EBIT Adjusted: $4.3B, up ~$750M YoY
- Full-Year 2026 EBIT Adjusted Guidance: $13.5B to $15.5B (raised from $13B to $15B)
- Full-Year 2026 EPS Diluted Adjusted Guidance: $11.50 to $13.50 (raised from $11 to $13)
- TIKR Model Price Target: ~$88
- Implied Upside: ~11%
General Motors Stock Delivers Profit Beat as EV Drag Shrinks
General Motors stock (GM) opened Q1 2026 with adjusted EPS of $3.70, beating the prior-year quarter’s $2.78 by 33% and surpassing Street expectations of $2.64 by more than 40%.
Total revenue came in at $43.6B, essentially in line with estimates of $43.5B and down slightly from $44.0B in Q1 2025, with the decline driven by lower EV wholesale volumes as GM deliberately right-sizes its electric capacity.
North America remained the engine of GM’s profitability, with Q1 EBIT adjusted of $3.7B and a 10.1% EBIT margin, according to CFO Paul Jacobson on the Q1 2026 earnings call.
That headline margin includes a 1.5-point benefit from a tariff accounting adjustment tied to a recent Supreme Court decision on IEEPA tariffs, netting to an 8.6% underlying margin.
EV losses contributed meaningfully to the YoY EBIT improvement, declining by several hundred million dollars versus Q1 2025, driven by lower volumes, manufacturing efficiencies, and reduced fixed costs, according to Jacobson.
GM also recorded an additional $1.1B in EV-related restructuring charges during Q1, primarily from supplier contract cancellations, with approximately $1B expected to carry a future cash impact.
GM Financial delivered EBT adjusted of $700M, while GM International, excluding China, generated approximately $40M in EBIT adjusted despite disruptions from the Iran conflict in the latter part of the quarter.
China equity income was $100M for the quarter, excluding a plant sale gain, marking the sixth consecutive profitable quarter in the region.
OnStar digital services recognized revenue exceeded $750M in Q1, up more than 20% YoY, according to Jacobson, with full-year 2026 recognized revenue guided to $3.1B, up 15% YoY.
Management raised full-year EBIT adjusted guidance to $13.5B to $15.5B and EPS diluted adjusted guidance to $11.50 to $13.50, citing the IEEPA tariff adjustment as the primary driver of the increase.
GM maintained its adjusted auto free cash flow guidance of $9B to $11B, with heavier weighting to the second half, and excluded the IEEPA tariff refund from that range given uncertainty on timing.
The company repurchased $800M in shares during Q1 at an average price of ~$75 per share and ended the quarter with $19B in cash and $5.5B remaining on its buyback authorization.
General Motors Stock: What the Income Statement Shows
General Motors stock is telling a margin recovery story that is real but uneven, with operating leverage returning to Q1 levels not seen since mid-2024 while gross margin remains under pressure from the prior year’s peaks.
Gross profit in Q1 2026 was $5.0B, down from $5.35B in Q1 2025, with gross margin compressing from 12.2% to 11.5%.
That compression reflects the mixed cost environment: warranty savings and lower EV losses partially offset by incremental tariff costs of $200M and higher commodity and logistics expenses tied to the Iran conflict.
The prior four quarters illustrate how sharply margins bottomed: operating margin hit 2.2% in Q3 2025, down from 8.7% in Q2 2024, before recovering to 6.5% in Q4 2025 and stabilizing at 6.7% in Q1 2026.
Operating income in Q1 2026 was $2.93B, down from $3.44B in Q1 2025, reflecting the 14.9% YoY decline visible in the income statement.
However, the EBIT adjusted figure of $4.3B, which includes equity income from China and other adjustments not fully captured in the GAAP operating line, surpassed the prior-year quarter by approximately $750M, according to Jacobson on the earnings call.
The divergence between the GAAP operating income trend and the adjusted EBIT improvement illustrates why management’s cost discipline on warranty, EV profitability, and regulatory expenses is the load-bearing element of the 2026 thesis.
What Does the Valuation Model Say?
TIKR’s model prices General Motors stock at a target of approximately $88, implying roughly 11% upside from the current price of ~$79.
The mid-case assumptions driving that target are a revenue CAGR of 2.5% through 2035 and a net income margin of 5.9%, consistent with GM’s demonstrated profitability range over the past decade.
Q1’s adjusted EPS beat of $3.70, against a full-year guide midpoint of $12.50, suggests the underlying earnings engine is running ahead of plan even before any resolution of the Iran conflict or commodity cost improvement.
The investment case is modestly stronger after this report: EV restructuring charges are tracking toward completion faster than expected, the digital services segment is scaling with better-than-expected subscriber and revenue metrics, and management raised guidance rather than trimming it in the face of macro pressure.
The TIKR model’s implied upside is narrow at 11%, reflecting a valuation that already prices in continued execution rather than leaving room for significant multiple expansion.
General Motors stock’s core ICE and services business is running ahead of plan, but the Iran conflict and rising commodity costs make the size of full-year outperformance impossible to call from here
Bull Case
- EV restructuring charges are approximately 90% settled, according to Jacobson, with most remaining cash outflows expected in Q2 2026, removing a multi-quarter overhang from the P&L
- OnStar digital services revenue is tracking toward $3.1B in 2026, up 15% YoY, with deferred revenue approaching $7.5B by year-end, a high-margin stream that is structurally non-cyclical
- North American EBIT adjusted margin reached 8.6% on an underlying basis in Q1, already within the 8% to 10% full-year target range, with next-generation full-size pickups launching in the second half of 2026 as a potential volume catalyst
- At ~$79 per share, GM trades at roughly 6x the midpoint of full-year adjusted EPS guidance of $12.50, leaving significant room for multiple expansion if execution holds
Bear Case
- GM raised commodity and logistics cost guidance by $500M to a full-year range of $1.5B to $2B, driven by higher energy prices tied to the Iran conflict, with the duration of that pressure explicitly uncertain per CEO Mary Barra on the Q1 call
- Q1 GAAP operating income of $2.93B was down 14.9% YoY, a deterioration that the adjusted EBIT narrative does not fully obscure and that signals real gross margin compression from $5.35B to $5.0B
- EV market stabilization is slow: management guided EV volumes lower for 2026 and cited industry penetration hovering around 6% of U.S. sales, limiting the near-term profitability recovery from the segment
- The TIKR model’s mid-case IRR is 3.7% annually through 2030, a thin return profile for investors requiring equity-level compensation given the macro and operational uncertainty in the near term
Should You Invest in General Motors Company?
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