(BFM Bourse) – The Detroit automobile group has delivered optimistic outlooks for the current year, which gives a small boost to its stock but also to other groups in the sector listed on the stock exchange.
Between Tesla which is plunging on the stock market with a big slowdown expected on its growth in 2024 and Renault which is shelving its planned IPO of its electrical activities, Ampere, the recent news is hardly exciting for the automobile industry.
But General Motors (GM) brightens the horizon a little this Tuesday. The group based in Detroit and owner of the Cadillac, Chevrolet and Buick brands has delivered its results for the fourth quarter of 2023 as well as its outlook for the current year.
GM significantly beat analysts’ expectations, reporting revenue of $43 billion in the final three months of 2023, compared to a consensus of just $38.7 billion, according to CNBC, while adjusted net earnings per share, a key indicator on Wall Street, came to 1.24 dollars against a consensus of 1.16 dollars.
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Perspectives that atomize the consensus
Above all, the perspectives communicated by the group led by Mary Barra are encouraging. General Motors expects adjusted operating profit of $12 billion to $14 billion in 2024 and adjusted net earnings per share of between $8.5 billion and $9.5, while its cash flow is expected between $8 billion and $10 billion. of dollars.
For comparison, its adjusted operating income stood at $12.4 billion last year, its adjusted earnings per share at $7.68 and its cash flow at $11.7 billion.
And, according to Wedbush’s Dan Ives, the market previously expected 2024 adjusted operating income of less than $11 billion and adjusted net income per share of just $7.75. In other words, GM has clearly outpaced the analysts. Dan Ives thus evokes “robust” 2024 prospects.
Beyond the figures, GM expects to benefit from its cost reduction program but also from market share gains thanks to greater penetration of its electric vehicles, which will drive revenue growth.
Stock market jump
“As we enter 2024, I believe GM is well positioned for a year of strong financial performance that will build on everything we accomplished – and learned – in 2023,” said GM Chief Executive Officer Mary Barra. , in a letter to shareholders.
“There is growing recognition that the U.S. economy, job market and auto sales will continue to be resilient, and at GM we expect healthy sales for the entire industry of approximately 16 million units (in the United States, compared to 15.5 million in 2023), with an electric vehicle mix that continues to grow,” she continued.
While the market is increasingly doubting the prospects of electricity, the manager preferred to see the glass half full. “It’s true that the pace of growth of electric vehicles has slowed, which has created some uncertainty. But according to many third-party forecasts, U.S. electric vehicle deliveries would grow from about 7% of the sector in 2023 to at least 10% in 2024, which would mean another year of record sales of electric vehicles,” explained Mary Barra.
“With Barra and company in the midst of a massive transformation in electric vehicle, this was a key quarter and outlook for the stock market to gauge GM’s resilience, as it appears profit margins and growth objectives are still on track despite a difficult context”, appreciates Dan Ives.
On Wall Street, General Motors gained 9.3% in early trading following this good publication.
The figures from the Detroit group, published around 12:30 p.m. Paris time, gave a boost to all automobile stocks in the sector. Previously amorphous, Stellantis jumped significantly following this publication, gaining 3.6% around 1 p.m. and gaining another 3% around 3:45 p.m. Volkswagen, for its part, has turned upwards and is up 0.6%, while Renault is currently up 0.9%. Ford, for its part, takes 2% on Wall Street.
Julien Marion – ©2024 BFM Bourse