Heading into the event, GM's stock has been facing challenges despite significant buybacks. Although shares have risen approximately 28% this year, they have dropped 9% from a July high of over $50 and are down about 8% since early last month. A notable 5.4% decline occurred last month, marking the second-largest single-day drop this year, following analyst downgrades due to price adjustments. Morgan Stanley and Bernstein recently downgraded GM, citing tough market conditions and limited upside potential. Bernstein analyst Daniel Roeska mentioned in a September 23 note the need to await GM's market updates before downgrading to Market-Perform. Despite this, GM's stock remains rated as overweight with an average price target of $54.64 per share according to FactSet's compilation of 29 analysts' estimates.

Ongoing Issues

Investors are not only worried about the possibility that automakers like GM may have already seen their peak profits, but they are also concerned about GM's restructuring efforts in China. This restructuring was announced with minimal details, aside from GM indicating it was necessary due to a prolonged decline in its business there. In 2018, GM's operations in China generated $2 billion in equity income, but they reported a $104 million loss in the second quarter, marking the second consecutive quarterly loss after reaching a nearly 20-year low in 2023. The Chinese market is highly competitive with domestic brands like BYD, leading to a pricing war, particularly in the electric vehicle sector.

Key Points

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GM’s 2024 Chevrolet Equinox EV (right) next to a gas-powered Chevy Equinox on May 16, 2024 in Detroit

In GM's domestic market, investors are eager for updates on its strategies for electric and hybrid vehicles. Unlike Ford, which has intensified its hybrid focus, GM has not offered a hybrid option beyond the Corvette in recent years.BofA Securities analyst John Murphy noted that the upcoming event might reveal GM's approach to balancing the slowdown in EV adoption with its future plans, likely emphasizing hybrid technology alongside electrification.GM anticipates its EVs will become profitable on a contribution-margin basis once production hits 200,000 units by the fourth quarter.Regarding Cruise, Wall Street is keen on understanding the future funding plans for this struggling autonomous vehicle division. After halting operations last year and replacing leadership following a pedestrian accident in October, Cruise is slowly attempting to resume activities but remains far from its previous status.