The stock closed at over $53 yesterday, rebounding sharply from below $49 the previous day. This marks an impressive growth of approximately 50% since the start of the year. The significant increase in GM’s stock price can be linked to a strong earnings report for the third quarter:
The company’s gross revenue rose by 10% year-on-year to $48.75 billion, surpassing analyst predictions of $44.67 billion. Earnings per share (EPS) increased by 30% compared to last year, reaching $2.96 against a forecast of $2.49. Furthermore, GM has raised its profit forecasts for the upcoming quarter and is ramping up its efforts in the production of autonomous vehicles. FXOpen 23.10 chart
The stock has established an upward channel (indicated in blue) in 2024, with the current price approaching the upper boundary of this channel. The psychological level of $50, previously a point of resistance since July, has now been surpassed. It’s worth noting that the $42 level transitioned from resistance to support after several months; $50 might exhibit a similar pattern going forward. The Relative Strength Index (RSI) has entered the overbought zone.
As for the future, the continuation of this upward trend remains uncertain. It is conceivable that once the initial excitement from the robust earnings report fades, GM’s share price may undergo a correction. This scenario appears plausible, especially given the stock’s current position near the channel’s upper boundary and the overbought condition indicated by the RSI. Should a correction occur, the price might revert to the median line of the blue channel.
According to TipRanks, a majority of analysts, specifically 11 out of 20, advocate for buying GM shares, with a projected average target price of $55 over the next year. Given the solid fundamentals demonstrated by General Motors, it’s possible that analysts may revise their forecasts upward in light of recent performance.
