GM’s retail market share is stronger than some peers. But any possible downturn in the US auto market could hugely affect GM’s business going forward.
As of April 20, GM’s forward EV-to-EBITDA multiple was 5.8x—much lower than Ford’s 12.1x as of the same date.
About 36% of the analysts covering General Motors have issued “buy” recommendations, while 59% of analysts have issued “hold” recommendations.
In 4Q17, General Motors (GM) reported strong revenues of about $43.9 billion, which reflected a rise of 9% over the $39.6 billion in revenues we saw in 4Q15.
In 4Q16, GM’s reported adjusted EBIT of $2.4 billion, with a margin of 10.1%. This margin was lower than its adjusted EBIT margin of 12.2% in 4Q15.
In 4Q16, General Motors (GM) reported an adjusted EPS (earnings per share) of $1.28, which was about 8% lower than its 4Q15 EPS of $1.39.
As of April 20, General Motors stock has lost about 3.6% on month-to-date basis, as compared to the 0.3% month-to-date drop in the S&P 500 Index (SPY).
On March 17, Ford stock tested the upper range of the descending channel near $12.75. It couldn’t close above the level and turned negative.
Ford’s forward PE (price-to-earnings) multiple is 6.9x—higher than General Motors and Fiat Chrysler’s forward PE multiples of 5.6x and 4.4x, respectively.
During its 1Q17 earnings event, investors should watch for any announcement about Ford’s plans to protect its margins.
In 4Q16, Ford reported adjusted gross profit of $2.8 billion with a gross profit margin of 7.1%—much lower than the adjusted gross profit margin in 4Q15.
In 4Q16, Ford’s revenues stood at $38.7 billion—down $1.6 billion from its revenues in 4Q15. However, its revenues were higher than analysts’ estimates.
According to the latest data compiled by Reuters, 58% of the analysts gave “hold” ratings on Ford (F) stock, 33% gave it a “buy,” and 8% gave it a “sell.”
Analysts expect the existing negative trend in Ford’s earnings to continue in the coming two or three quarters. Ford will likely post EPS of $0.36 in 1Q17.
Ford Motor Company (F) is set to release its 1Q17 earnings report on April 27, 2017. So far in April, Ford has underperformed the broader market.
On April 19, 2017, FCAU stock traded at $9.97. The stock has risen about 6.8% in fiscal 2017 year-to-date.
According to Wall Street analysts’ estimates, FCAU is likely to report an EBITDA margin of ~11.3% in 1Q17.
In January 2017, FCAU guided to reduce its net industrial debt to less than 2.5 billion euros, or $2.7 billion, by the end of this year.
Similarly, FCAU’s forward price-to-earnings multiple is 4.4x, which is lower than GM’s forward PE multiple of 5.6x and Ford’s forward PE multiple of 6.9x.
Of the 27 analysts covering Fiat Chrysler (FCAU), 36% are giving the stock a “buy” recommendation, and 39% of the analysts are recommending a “hold.” The remaining 25% of the analysts have recommended a “sell” on FCAU stock.