The Outlook for General Motors, Ford, and Stellantis

As the traditional Detroit automakers gear up to report their second-quarter results, all eyes are on General Motors (GM) to be the standout performer. Wall Street analysts are predicting a solid adjusted profit of $2.75 per share for GM, representing a substantial 44.2% increase from the same period last year. Additionally, the company is expected to report $45.46 billion in revenue, marking a 1.6% growth over the prior year.

In contrast to GM, Ford Motor is facing a more conservative projection. Analyst estimates compiled by financial markets data and analytics company LSEG suggest that Ford may see a decline in adjusted earnings per share to 68 cents for the second quarter, down by 5.2% from the previous year. However, Ford’s automotive revenue is anticipated to rise by 3.8% to $44.02 billion compared to the same period in 2023.

Stellantis, the parent company of Chrysler, is facing its own set of challenges, with concerns about its North American operations weighing on investors. Despite reporting an adjusted operating profit for the first half of the year, Stellantis has been struggling to address issues such as declining sales, bloated inventories, and investor apprehensions. The company’s finance chief, Natalie Knight, remains optimistic, reaffirming Stellantis’ 2024 guidance that includes a double-digit adjusted operating income margin and positive industrial free cash flow.

Industry analysts have varying opinions on the outlook for GM, Ford, and Stellantis. Barclays analyst Dan Levy anticipates both Ford and GM to surpass expectations in the second quarter, buoyed by favorable pricing and volume/mix benefits. Evercore analyst Chris McNally leans towards GM, citing the automaker’s lower pricing as a competitive advantage. However, Ford is expected to have a solid second quarter, potentially aligning with the upper end of its projected 2024 guidance.

With shares of Stellantis down by more than 12% in 2024, there is growing concern about the company’s performance. CEO Carlos Tavares has acknowledged challenges within the organization, including slow inventory turnover, manufacturing issues, and inefficiencies in go-to-market strategies. Despite these setbacks, analysts project Stellantis to remain profitable in 2024, albeit with a slight dip in adjusted earnings per share from the previous year.

Investors are keen on updates regarding the electric vehicle strategies, capital spending plans, and rising inventory levels of GM, Ford, and Stellantis. As the industry shifts towards electric mobility, the performance and adaptability of these automakers will be crucial in maintaining their market competitiveness. While pricing dynamics remain favorable, concerns around elevated inventory levels in the U.S. pose a potential challenge for long-term profitability.

The outlook for General Motors, Ford, and Stellantis presents a mixed bag of forecasts and challenges. While GM appears to be on track for a strong quarter, Ford is facing some headwinds, and Stellantis is working towards overcoming operational hurdles. As the automotive industry continues to evolve, the ability of these companies to innovate, adapt, and capitalize on emerging trends will ultimately determine their success in the marketplace.