GM Gains On Solid 4Q Vehicle Sales; Street Sees 25% Upside

General Motors’ US auto sales rose 5% in the fourth quarter compared to the same period last year. up 5% from the year-ago period. General Motors stock closed 2.8% higher on Tuesday.

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During the quarter, the US automaker sold 771,323 vehicles. GM (GM) said that retail deliveries increased 12% year-on-year in 4Q, marking “its best fourth quarter retail sales since 2007.” The company noted that retail sales for the industry reached pre-pandemic levels during the quarter.

For the calendar year 2020, the company’s total deliveries and retail deliveries fell year-on-year by 12% and 6%, respectively. During the year, the carmaker sold 2,547,339 vehicles and ended the year with an inventory of 410,875 units, down from 616,023 units at the end of 2019. (See GM stock analysis on TipRanks)

GM’s Steve Carlisle commented, “GM outperformed the industry in the quarter and the full year by a significant margin because our manufacturing and supply chain teams and dealers helped keep people safe at work and our launches on track.”

On Dec. 21, Benchmark analyst Michael Ward raised the stock’s price target to $51 (22.4% upside potential) from $47 and reiterated a Buy rating. Ward believes that GM’s North American operations, China operations, and GM Financial businesses will see improved performance in 2021. The analyst sees low-interest rates, share gains, and rising used vehicle prices as key growth catalysts for the company.

The stock scores an analyst consensus of a Strong Buy based on 10 Buys and 1 Hold. With shares up nearly 14.7% over the past year, the average price target of $52.09 implies further upside potential of about 25% to current levels.