GM Stock Declines Today Following Release of February Sales Numbers
NEW YORK (TheStreet) -- GM (GM) - Get Report shares are down 0.16% to $37.55 in trading on Tuesday after the U.S. automaker reported February sales numbers that failed to meet analysts expectations for the period today.
General Motors February sales were up 4.2%, missing analysts 5.9% estimates for the period. February vehicle sales totaled 231,378 versus the 222,104 vehicles it sold during the same period last year.
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The company had been forecast to sell 239,000 new vehicles in the month by analysts at WardsAuto. Kelly Blue Book and Edmunds forecast new vehicle sales of 235,000 and 230,000, respectively.
The company's Cadillac division reversed the year over year 3.4% growth it experienced in January, posting a February vehicle retail sales decline of 18.4% while total sales fell 12.6% in the month.
The company's new Chevrolet Colorado and Silverado pickup truck sales increased by 6,562 and 8,811 units, respectively.
Last week, TheStreet's Jim Cramer set a $45 price target on the company's shares.
"Whether they prove successful or not, we are more interested in the fundamentals: the improving health of the domestic consumer, lower gas prices that allow consumers to purchase higher-margins vehicles, the removal of the overhang from the ignition-switch related recalls, and the product cycle story, which is in the sweet spot in mix, margins and share. The stock took a breather after gaining more than 5% last week and is still at an attractive 8.2x multiple. Our target is $45," said Cramer.
TheStreet Ratings team rates GENERAL MOTORS CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENERAL MOTORS CO (GM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 91.0% when compared to the same quarter one year prior, rising from $1,040.00 million to $1,987.00 million.
- Net operating cash flow has slightly increased to $3,164.00 million or 3.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.72%.
- GENERAL MOTORS CO has improved earnings per share by 15.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $1.64 versus $2.35 in the prior year. This year, the market expects an improvement in earnings ($4.46 versus $1.64).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.1%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for GENERAL MOTORS CO is rather low; currently it is at 16.84%. Regardless of GM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.01% trails the industry average.
- You can view the full analysis from the report here: GM Ratings Report