It should have been much bigger news for General Motors (NYSE:GM), as it revealed its latest batch of quarterly sales numbers. In fact, it posted a pretty serious win by any measure. But investors weren’t kind and sent shares of the automaker down fractionally in Tuesday afternoon’s trading.
GM reported that sales were the best they have been since the fourth quarter of 2020. It saw increases largely across the board, with overall sales up 0.6% against this time last year and its electric vehicle deliveries surging 40%. Moreover, its full-size pickup sales gained, reaching around 229,000 units in the second quarter. In addition, the firm’s sales are poised to outsell the overall industry, if only by a small margin.
GM also made the move to change up its advertising mix, pulling work away from Leo Burnett Detroit and Commonwealth/McCann to add Anomaly and 72andSunny to the mix, along with Independent shops Mother and Preacher.
Potential Troubles Ahead
While the news is largely good, and GM is making a lot of headway, that headway doesn’t come without some downsides. Yes, GM’s electric vehicle sales are up, and in a big way. But much like a “Dilbert” strip once chimed in, it’s hard to get excited about a huge percentage increase over a trivial base. EV sales are up 40%, but even that monster surge still only gets GM to 21,930 total units. Moreover, GM’s sales for the first half of 2024 are down 0.4% overall.
Just to top it off, GM is also facing the fallout from a major cyberattack on CDK Global. The attack, a large-scale ransomware attack, basically required CDK Global to shut down the entire dealer network. Now, dealerships are going back to pen-and-paper sales, and that’s going to seriously hinder sales. While the CDK system should be back up by the Fourth, there is still a lot of transaction data to manually enter.
Is GM a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on GM stock based on 12 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 21.02% rally in its share price over the past year, the average GM price target of $56.60 per share implies 21.25% upside potential.
