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General Motors (GM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
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General Motors (GM) closed at $34.81 in the latest trading session, marking a +1.31% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.97%. Elsewhere, the Dow gained 1.09%, while the tech-heavy Nasdaq added 1.08%.

Prior to today's trading, shares of the automaker had lost 0.17% over the past month. This has was narrower than the Auto-Tires-Trucks sector's loss of 0.71% and the S&P 500's loss of 3.04% in that time.

GM will be looking to display strength as it nears its next earnings release, which is expected to be February 5, 2019. On that day, GM is projected to report earnings of $1.19 per share, which would represent a year-over-year decline of 27.88%. Meanwhile, our latest consensus estimate is calling for revenue of $36.72 billion, down 2.65% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for GM. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 1.18% higher within the past month. GM is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, GM is holding a Forward P/E ratio of 5.9. Its industry sports an average Forward P/E of 9.93, so we one might conclude that GM is trading at a discount comparatively.

We can also see that GM currently 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. GM's industry had an average PEG ratio of 1.24 as of yesterday's close.

The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 21, which puts it in the top 9% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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