On Tuesday, General Motors (GM) unveiled a new $6 billion share buyback plan, coming just over a month after the company raised its dividend on the back of a positive annual outlook, supported by steady gasoline-engine vehicle prices and demand.
Back in November, GM had announced a $10 billion stock repurchase plan shortly after finalizing an expensive new labor deal with the United Auto Workers union. The company completed the first portion of this buyback in Q1 and is on track to reduce its outstanding share count to below 1 billion. As of the latest closing, GM’s market capitalization stood at $54 billion, according to LSEG data.
In April, GM increased its dividend by 33% to 12 cents per share. The company’s shares saw a 1% uptick in premarket trading following the announcement.
General Motors: Looking Ahead
GM is strategically positioning itself for future growth through a robust focus on electric and autonomous vehicles. The company’s significant investments in the Ultium battery platform and the development of software-enabled services highlight its commitment to innovation and new revenue streams in the evolving automotive landscape.
With raised guidance for 2024, GM now anticipates a full-year adjusted EBIT between $12.5 billion and $14.5 billion, reflecting a 4% increase from previous estimates. Adjusted earnings are projected to reach $9-$10 per share, a 6% improvement from prior forecasts. Additionally, GM has enhanced its automotive operating cash flow and adjusted free cash flow outlook.
Despite international challenges, GM remains dedicated to advancing its EV and AV initiatives, aiming to lead the industry’s transition to electrification and autonomous mobility. The company’s proactive adaptation to market changes and emphasis on strategic investments position it well for sustained growth. Investors should keep an eye on GM’s execution and market adaptation strategies, as the company’s innovative focus suggests a promising future.
