After years of lagging the market, General Motors Company (NYSE: GM) stock finally started to gain some traction in the second half of 2017 on reports the company’s transition to the driverless, electric age of the auto industry may be going smoother than anticipated.
Investors are hoping General Motors can carry that positive momentum into 2018 when it reports its earnings for the fourth quarter before the market open on Feb. 6, and analysts are expecting some solid numbers.
Analysts are anticipating fourth-quarter earnings per share of $1.38, up 7.8 percent from a year ago. Wall Street is also forecasting revenue of $38.5 billion, down 12.3 percent.
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In GM’s third-quarter earnings report, the company guided for full-year 2017 adjusted EPS of between $6 and $6.50.
Investors will also be watching for any changes to the company’s 2018 guidance. On January 18, GM CFO Chuck Stephens painted a relatively rosy picture for GM this year. “We expect to deliver record earnings per share at the high end of the $6 to $6.50 range, which is an increase from our prior guidance,” Stephens says.
GM’s optimism for 2018 is in stark contrast to rival Ford Motor Co. ( F ), which said rising costs would result in an earnings decline in 2018.
In addition to top- and bottom-line numbers, GM investors will be watching for updates about the company’s heavy investments in autonomous vehicle technology. Positive industry commentary about GM’s AV technology is one of the main reasons GM stock has more than doubled the returns of Tesla ( TSLA ) and Ford in the past six months.
In January, Navigant Research named GM and Alphabet ( GOOG , GOOGL ) subsidiary Waymo as the two clear market leaders in AV technology. This week, the state of California reported that GM vehicles logged more than 131,000 fully driverless miles on public roads in 2017, up from less than 10,000 miles in 2016.
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Bank of America analyst John Murphy says GM stock still has plenty of room for upside considering its modest valuation and potential growth catalysts.
“The accelerating focus on future-proofing the business with the development of the necessary components of the future of mobility services, including an autonomous EV fleet, car sharing and connectivity may provide upside,” Murphy says.
Bank of America has a “buy” rating and $57 price target for GM stock.
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