What Happened?<\/p>\n
General Motors (GM<\/a>) stock exploded 15% higher on Tuesday after the automaker reported third-quarter earnings that crushed Wall Street expectations<\/a> and raised its full-year guidance. But the real catalyst? CFO Paul Jacobson told investors that 2026 will be even better than 2025.<\/p>\n \u201cLooking ahead to 2026, we have multiple levers to carry our current momentum forward, including progress on electric vehicle losses, warranty costs, tariff offsets, regulatory requirements and fixed costs,\u201d Jacobson said on the earnings call. \u201cAs a result, we expect next year to be even better than 2025.\u201d<\/p>\n GM stock has been crushing it this year, with gains exceeding 50%, and management just signaled the momentum isn\u2019t stopping.<\/p>\n GM now expects: <\/p>\n Adjusted earnings before interest and taxes between $12 billion and $13 billion, up from the previous range of $10 billion to $12.5 billion. <\/p>\n Adjusted earnings per share between $9.75-$10.50 from $8.25-$10. <\/p>\n Adjusted automotive free cash flow between $10 billion and $11 billion, up from $7.5 billion and $10 billion.<\/p>\n These are material increases that show the business is performing way better than expected.<\/p>\n See analysts\u2019 growth forecasts and price targets for GM stock (It\u2019s free!) >>><\/a><\/p>\n What the Market Is Telling Us About GM Stock<\/p>\n The market\u2019s reaction to GM stock<\/a> shows investors believe the company has turned a corner. Jacobson emphasized that GM will continue to buy back shares aggressively. <\/p>\n At the end of the third quarter, GM had 954 million shares outstanding, down 15% from a year ago. That\u2019s a massive reduction that boosts earnings per share and shows management believes the stock is undervalued.<\/p>\n \u201cWe\u2019re going to continue to just focus on executing the business and executing the plan, and that\u2019s worked really well for us and we expect it will in \u201926,\u201d Jacobson said. That execution focus is resonating with Wall Street.<\/p>\n CEO Mary Barra and Jacobson laid out the company\u2019s top priority: getting adjusted profit margins in North America back to 8% to 10%. The margin hit 6.2% in the third quarter, indicating there\u2019s room for improvement. <\/p>\n TD Cowen analyst Itay Michaeli called the commentary \u201cencouraging and consistent with our incoming view that automakers could convey positive messaging beyond 2025.\u201d <\/p>\n RBC Capital Markets analyst Tom Narayan said he expects 2026 analyst consensus estimates to \u201cmove significantly higher\u201d following the results.<\/p>\n Perhaps the most telling comment came from Citi\u2019s Michael Ward, who noted that GM stock is benefiting from a cultural shift within the company. <\/p>\n \u201cIn the past it was said it was difficult to turn the big ship GM too quickly. Given the changing landscape, GM has found a way to turn it much faster than in the past.\u201d<\/p>\n General Motors has historically been slow to adapt, but management is proving it can move quickly and execute. <\/p>\n The company is making progress on several key areas, including reducing electric vehicle losses, cutting warranty costs, offsetting tariff impacts, and managing fixed costs. <\/p>\n GM stock is trading near its 52-week high, and with management guiding for an even better 2026, investors clearly think there\u2019s more room to run. <\/p>\n The combination of strong execution, aggressive share buybacks, and improving profit margins makes this one of the more compelling turnaround stories in the auto sector right now.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/10\/GM-stock_83333c9a66.webp\")
GM Stock Earnings vs. Estimates (TIKR<\/a>)<\/p>\nGM Stock Valuation Model (TIKR<\/a>)<\/p>\n