2024-05-14 11:27:28 ET
Summary
- General Motors is effectively managing the impact of strikes, resulting in improved operating margins in Q1 2024.
- This quarter, the company will begin production of previously promised higher-margin models.
- General Motors is making progress in the electric vehicle segment, with plans to release new models and increase EV sales forecast for 2024 and 2025.
Investment thesis
General Motors is managing the impact of the strikes very well: automotive and other cost of sales fell to 87% of revenue in Q1 2024, down from a record 93% in Q4 2023 and against our expectations of 91% of revenue. General and administrative costs are also recovering faster than we expected. Together, this resulted in an operating margin of 8.7% in Q1 2024 (+6.4 percentage points QoQ).
We have covered the stock befo re and published our previous forecast after GM's 4Q 2023 earnings rep ort. Since our last article, stock prices have risen more than 15% and our BUY recommendation was correct (as well as our earlier purchase recommendation). This article is dedicated to updating the forecast for the company's key indicators, as well as providing an overview of the state of various business segments. ...
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For further details see:
General Motors: Lower Costs Lead To Higher EBITDA Forecast