GM Stock Rises 3% Despite 5.5% Drop in Q3 U.S. Vehicle Sales
Key Takeaways
- •GM stock gained 3% to $79.29 even though third-quarter U.S. sales fell 5.5% to 670,974 vehicles.
- •The expiration of the $7,500 federal EV incentive made year-over-year comparisons tough, with GM's Equinox EV sales down 92% and Hummer EV sales down 73%.
- •Toyota cut its gap behind GM to fewer than 136,000 units from more than 335,000 a year earlier, with electrified vehicles making up 57% of its sales mix.
- •Honda's U.S. sales rose 9.3%, driven by record quarterly hybrid volume exceeding 106,000 units.
- •Analysts maintain a Strong Buy consensus on GM based on 14 recent Buy ratings, with an average price target of $111.14 implying roughly 40% upside.
General Motors (GM) stock rose 3% to $79.29 on Thursday, even as the automaker reported a 5.5% decline in third-quarter U.S. vehicle sales.
GM sold 670,974 new vehicles during the quarter, down from the same period last year, when its electric vehicle sales reached record highs. The year-over-year comparison was affected by buyers rushing to claim a $7,500 federal EV incentive before it ended. Pull-forward buying around a deadline can shift demand between quarters, and how EV demand develops now that the incentive has ended is one thread to follow into the closing months of the year.
GM’s EV sales fell sharply this year. Sales of the Equinox EV dropped 92%, while Hummer EV sales declined 73%. The automaker also has limited hybrid coverage. Its only hybrid option is the Corvette, leaving it with less exposure to demand for hybrid vehicles than some competitors.
Toyota and Honda Report Stronger Sales
Toyota’s U.S. sales rose 0.6% to 633,223 units. Sales of electrified vehicles, including hybrids, increased 28.5% and accounted for 57% of Toyota’s sales mix. The results narrowed Toyota’s gap with GM to fewer than 136,000 units, compared with more than 335,000 units a year earlier. With one quarter left in the year, that shrinking margin helps frame the race for the U.S. sales lead.
Honda reported a 9.3% sales increase, supported by record demand for hybrids. The company sold more than 106,000 hybrid vehicles during the quarter, a record for Honda.
“We’re finding more and more consumers are figuring out hybrids meet their needs,” said Lance Woelfer, head of American Honda’s U.S. sales.
High gasoline prices also presented a challenge for GM. The national average stood at $4.41 per gallon, potentially affecting demand for the large trucks and SUVs that form a significant part of GM’s lineup.
GM Sees Strength in Small SUVs and Trucks
Not all of GM’s sales categories declined. The company said its affordable small SUV lineup, including the Chevrolet Trax and Buick Envista, recorded its best quarterly sales ever. Trailblazer sales increased 51%, Envista sales rose 18.4%, and Trax sales climbed 16.3%.
GM also highlighted its continued leadership in full-size pickups and fleet sales. Cadillac was a weaker area, with sales down 25% year to date. Every GM brand was lower so far this year.
GM President Duncan Aldred remained positive and pointed to the next-generation Silverado and Sierra trucks, which are expected to begin reaching dealerships in the fourth quarter. Their early sales will be a natural point to watch when fourth-quarter results begin to arrive.
Despite the sales decline, GM has a Strong Buy consensus rating based on 14 Buy ratings issued during the past three months. The average price target is $111.14, implying roughly 40% upside from the stock’s current level. Consensus ratings and price targets reflect analyst opinion at a point in time and can change as new results come in.
Other automakers reporting Thursday included Stellantis, whose sales were roughly flat, with Ram sales up 29%; Nissan, 1.4%; Hyundai, up about 3%; and Kia, up 7.8% after selling a record 236,659 units during the quarter.
Source: CoinCentral
