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General Motors (GM) Stock Sinks As Market Gains: Here's Why

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The latest trading session saw General Motors (GM - Free Report) ending at $48.04, denoting a -1.72% adjustment from its last day's close. The stock's performance was behind the S&P 500's daily gain of 0.28%. Meanwhile, the Dow experienced a rise of 0.15%, and the technology-dominated Nasdaq saw an increase of 0.15%.

Coming into today, shares of the an automotive manufacturer had gained 0.64% in the past month. In that same time, the Auto-Tires-Trucks sector gained 4.76%, while the S&P 500 gained 2%.

Analysts and investors alike will be keeping a close eye on the performance of General Motors in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $2.54, reflecting a 11.4% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $44.93 billion, indicating a 1.81% upward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $9.95 per share and revenue of $177.15 billion, which would represent changes of +29.56% and +3.09%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for General Motors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. General Motors currently has a Zacks Rank of #3 (Hold).

In the context of valuation, General Motors is at present trading with a Forward P/E ratio of 4.91. This valuation marks a discount compared to its industry's average Forward P/E of 14.2.

It's also important to note that GM currently trades at a PEG ratio of 0.57. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Automotive - Domestic industry currently had an average PEG ratio of 1.47 as of yesterday's close.

The Automotive - Domestic industry is part of the Auto-Tires-Trucks sector. This industry, currently bearing a Zacks Industry Rank of 167, finds itself in the bottom 34% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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