A recent report from financial publication Barron’s brought forth some positive news surrounding General Motors’ financial performance during a much-anticipated financial downtown.
Stating that General Motors is a cyclical stock, Barron’s affirmed the widespread expectation of a downturn in automotive sales volume in the near future, adding that it expects GM’s trough earnings per share (EPS) to be better than many investors are expecting, perhaps around $3 to $4 per share. For the 2016 calendar year , GM reported an EPS of $6, slightly higher than in 2015.
A week ago, the investment publication stated that a sale of GM’s long-time unprofitable European division Opel could result in a 35 percent improvement in the value of GM stock. General Motors has been in advanced stages of negotiations to sell its European operations to PSA. Informally known as Opel, the unit consists of the Opel brand, which is sold all over Europe except for the United Kingdom, as well as the British Vauxhall brand, which is sold exclusively in the U.K. The two firms are reportedly looking to finalize negations by March 1, prior to the start of the 2017 Geneva International Auto Show.
The market reacted positively upon receiving news of negotiations between the two automakers, sending the value of GM shares up nearly 5 percent.