General Motors is set to lead the pack among Detroit’s traditional automakers as it prepares to report its second-quarter results. Analysts are bullish on GM, forecasting a solid adjusted profit of $2.75 per share, representing a 44.2% increase from the previous year. The company is also expected to post a revenue of $45.46 billion, marking a 1.6% growth compared to the same period last year.
Wall Street analysts anticipate GM to provide guidance towards the higher end of its already raised expectations for 2024 or potentially revise them upwards following the release of its second-quarter results. Barclays analyst Dan Levy believes that both GM and Ford are likely to exceed expectations, with GM benefiting from easy cost comps and favorable pricing.
On the other hand, there is less consensus among analysts regarding the outlooks for Stellantis and Ford. Evercore analyst Chris McNally views GM more favorably than Ford, citing the former’s lower pricing. Ford, however, is expected to have a solid second quarter, trending towards the upper range of its 2024 guidance.
Differing Guidance for 2024
Ford’s guidance for 2024 includes adjusted earnings before interest and taxes ranging between $10 billion and $12 billion, with free cash flow estimated to be between $6.5 billion and $7.5 billion. GM, on the other hand, expects adjusted earnings of $12.5 billion to $14.5 billion, with adjusted automotive free cash flow falling between $8.5 billion and $10.5 billion.
Stellantis, operating in North America and Europe, is in a different position compared to its competitors. The transatlantic automaker is expected to report an adjusted operating profit for the first half of the year, but concerns linger over its North American operations. CEO Carlos Tavares acknowledged the company’s past mistakes in the region and the need for corrective measures.
Despite Stellantis’ challenges, the company’s finance chief Natalie Knight reiterated the 2024 guidance, including a double-digit adjusted operating income margin and positive industrial free cash flow. However, shares of Stellantis have declined by over 12% in 2024, in contrast to the positive performance of GM and Ford’s stock.
Investors of GM, Ford, and Stellantis will be closely monitoring updates on their electric vehicle strategies, capital spending plans, and rising inventory levels in the U.S. Analysts believe that the U.S. auto market dynamics remain supportive of strong earnings, despite concerns about increasing inventory levels.
By examining the earnings expectations and outlook for General Motors, Ford, and Stellantis, investors and industry observers can gain insights into the performance of these automakers and their strategies to navigate the changing landscape of the automotive industry.