What Happened?
Shares of automotive manufacturer General Motors (NYSE: GM) jumped 5.8% in the afternoon session after shares of auto companies surged as the new Trump administration pledged its support for the industry. In a recent speech, President Trump stated, "Today, we will end the Green New Deal, and we will revoke the electric vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American auto workers."
Separately, Deutsche Bank upgraded the stock's rating from Neutral to Buy and raised the price target from $56 to $60. The firm added "Heading into earnings season, we upgrade GM from Hold to Buy given its recent strategic moves (China, Cruise), consistent track record of execution, and aggressive share buyback trajectory."
The shares closed the day at $53.90, up 5.8% from previous close.
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What The Market Is Telling Us
General Motors’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 9.2% on the news that the company reported strong third-quarter earnings results that blew past analysts' revenue and EPS expectations. Guidance was solid as its full-year EPS guidance exceeded Wall Street's estimates. Notably, the company raised the lower end of guidance for key operating metrics, including net income, adjusted operating income, free cash flow, and EPS. Overall, we think this was a solid quarter with some key areas of upside.
General Motors is up 4.9% since the beginning of the year, but at $53.90 per share, it is still trading 10.5% below its 52-week high of $60.20 from November 2024. Investors who bought $1,000 worth of General Motors’s shares 5 years ago would now be looking at an investment worth $1,540.
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