General Motors (GM) Outpaces Stock Market Gains: What You Should Know
General Motors (GM) closed at $34.63 in the latest trading session, marking a +1.11% move from the prior day. This move outpaced the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.03%, and the Nasdaq, a tech-heavy index, lost 0.05%.
Coming into today, shares of the automaker had lost 5.62% in the past month. In that same time, the Auto-Tires-Trucks sector lost 1.26%, while the S&P 500 gained 3.1%.
GM will be looking to display strength as it nears its next earnings release, which is expected to be October 23, 2018. In that report, analysts expect GM to post earnings of $1.28 per share. This would mark a year-over-year decline of 3.03%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $35.48 billion, up 5.52% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.95 per share and revenue of $145.57 billion, which would represent changes of -10.12% and -2.64%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for GM. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.84% lower. GM currently has a Zacks Rank of #5 (Strong Sell).
Digging into valuation, GM currently has a Forward P/E ratio of 5.75. Its industry sports an average Forward P/E of 12.66, so we one might conclude that GM is trading at a discount comparatively.
Also, we should mention that GM has a PEG ratio of 0.7. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Automotive - Domestic industry currently had an average PEG ratio of 1.28 as of yesterday's close.
The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 108, putting it in the top 42% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow GM in the coming trading sessions, be sure to utilize Zacks.com.
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