General Motors (GM) is emerging as a standout performer among automakers in 2024, surpassing both Wall Street’s financial expectations and its competitors in the market. The company’s stock price has seen impressive growth, rising by 54.7% ahead of Monday’s opening, which places it well above the performance of key industry players, including Tesla, as well as newer U.S.-based electric vehicle startups like Lucid Group and Rivian Automotive.
One major factor contributing to GM’s strong stock performance has been its commitment to returning value to shareholders through stock buybacks. Since last November, the automaker has repurchased $12.4 billion of its own shares, and the company indicates that it plans to continue this strategy. In a recent investor note, BofA Securities analyst John Murphy praised GM’s resilience, particularly after it exceeded Wall Street’s third-quarter expectations, writing, “GM keeps on trucking.”
GM’s success, however, extends beyond its financial maneuvers. The company’s operational performance has also outshined other established U.S. automakers like Ford Motor Company and Stellantis, the parent company of Chrysler. While GM CEO Mary Barra has long championed the company’s unique strengths, her message had struggled to resonate on Wall Street. Traditionally, GM’s stock had closely mirrored that of Ford due to their similar histories and the cyclical nature of the automotive industry. Yet, 2024 has seen GM break from that pattern. While GM’s stock has risen significantly, Ford’s has declined by 10% this year. Even Ferrari, one of the auto industry’s top-performing stocks, trails behind GM.
The automaker’s success comes despite challenging market conditions. GM has managed to avoid lowering its 2024 financial guidance or missing Wall Street’s earnings expectations, unlike many of its peers. Instead, GM has raised key financial targets while contending with various difficulties, including its struggles in the competitive Chinese market, which has generated significant losses for the company.
In contrast, other automakers have been forced into extensive cost-cutting measures and restructuring initiatives. Companies like Nissan, Volkswagen, and Stellantis have implemented significant workforce reductions, production adjustments, and other aggressive steps to control expenses. GM has managed to navigate the same turbulent environment without resorting to such drastic measures.
Under Barra’s leadership, GM has experienced a modest overall increase in its stock price, but investors had remained cautious for much of her tenure. The stock’s average closing price has been $38 per share since she took the helm in January 2014, below its closing price of $40.02 before her appointment. While Barra has made substantial strides in guiding GM through industry shifts and challenges, including the push toward electric vehicles (EVs), her tenure contrasts with the S&P 500’s nearly 300% rise during the same period. GM’s all-time high stock price under her leadership was $67.21 on January 5, 2022, shortly after she outlined GM’s EV growth ambitions.
Although Barra’s leadership has seen ups and downs, her focus on long-term competitiveness appears to be paying off in 2024. Barra has expressed confidence that GM’s strong performance will continue, setting the stage for a solid 2025. In a recent earnings call, she emphasized that GM intends to “build on our competitive strength and deliver the performance that differentiates us from others in the industry.” This strategy includes resilience and adaptability, she noted, allowing GM to make adjustments and capitalize on factors within its control to drive growth and profitability.
The broader market performance of GM’s competitors this year underscores its achievements. While GM has surged 54.7%, many rivals have struggled. Tesla’s shares have risen by 29.3% recently, thanks to strong support following the U.S. presidential election, yet it still trails GM. Other automakers have seen stock declines, including Ferrari (up 34.3%) and Hyundai (up 27.9%), but none have matched GM’s growth. At the other end of the spectrum, companies like Ford, Toyota, and Honda have experienced declines, with Ford down 10%, Toyota down 6.2%, and Honda down 13.3%. More starkly, Volkswagen and Nissan have plummeted by 28.2% and 36.1%, respectively, while companies like Lucid and Rivian, representing the new wave of EV startups, have seen their stocks fall by 47.5% and 54.9%, respectively.
GM’s forward momentum in 2024 is reflected in Wall Street’s optimism about its future. The stock is currently rated as “overweight” by analysts, with an average target price of $59.85 per share, according to data compiled by FactSet. As GM navigates the remainder of 2024, its ability to maintain this positive trajectory remains a critical question for investors and analysts alike. Barra has advised that GM anticipates a comparable performance in 2025, with some softness expected in the fourth quarter of 2024 but overall growth in line with this year’s strong showing.
While it’s uncertain how the year will end, Barra is confident that GM’s competitive positioning and disciplined strategy will continue to set it apart. “We’re going to be disciplined and we’ll be resilient, and we’ll make adjustments to the extent that we can to continue to drive growth and profitability,” she stated. This measured approach signals GM’s intention to maintain its gains, even as it faces ongoing challenges in the rapidly evolving automotive sector.
