On Thursday, RBC Capital Markets provided a positive outlook for General Motors Company (NYSE: NYSE:GM US), citing robust November sales data that surpassed expectations. The report highlighted that sales were likely boosted by various factors, including the aftermath of October hurricanes, the Thanksgiving holiday weekend, and favorable comparisons to the previous year's United Auto Workers (UAW) strike.
Want deeper insights into automotive stocks? InvestingPro subscribers get access to over 30 key financial metrics and exclusive analysis tools.
Stellantis (LON:0QXR) N.V. (NYSE:STLA) (MILAN: STLAM IM), currently trading at an attractive P/E ratio of 2.8x and maintaining a strong balance sheet with a current ratio of 1.14, saw a month-over-month increase in dealer inventories despite production cuts in the second half of the year.
Ford Motor Company (NYSE: NYSE:F US) also experienced a rise in inventories, potentially linked to upcoming product launches in the first quarter. In contrast, General Motors' inventories decreased, signaling a potentially advantageous position.
Average transaction prices (ATPs) in the industry are maintaining strength, and although Stellantis is on a downward trajectory, GM's ATPs remain resilient, up 29% from the end of 2019. GM's management is confident in achieving its inventory target of 50-60 days.
The RBC report suggests that factors such as low unemployment rates and a strong focus on internal combustion engine vehicles, pickups, and commercial vehicles are likely mitigating the impact of high prices and interest rates.
On the revenue front, the Chevrolet Silverado alone accounts for 18% of GM's year-to-date 2024 total revenues at US dealerships. The GMC Sierra 1500 follows at 12%, with the Chevrolet Silverado 2500 HD at 6%, and both the GM Sierra 2500HD and Chevrolet Equinox at 4%. Together, these five models represent nearly 45% of GM's dealer revenues in the United States.
General Motors' stock is currently rated as 'Outperform' with a price of $53.66. Meanwhile, Ford and Stellantis are both rated as 'Sector Perform' with Ford's shares priced at $10.82 and Stellantis' shares at €12.09.
According to InvestingPro analysis, Stellantis appears undervalued and offers an impressive 12.8% dividend yield, making it an interesting consideration for value investors.
Discover more investment opportunities with InvestingPro's comprehensive valuation tools and 12+ exclusive ProTips for Stellantis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.