Earlier today, General Motors Company reported third-quarter 2019 earnings, pleasantly surprising many analysts and investors with the $2.3 billion in income on $35.5 billion in revenue – solid results that showed GM is managing along favorably, despite the UAW strike that sapped it of even better results. And it seems that the market had a reaction, too, as GM stock jumped nearly 5 percent to $38.67 per share following the news.
If one were to have purchased GM stock about two weeks ago at $33.88 per share, one would have seen a return of almost 13 percent. Yes, this is indeed a cherry-picked statistic, but it just goes to show how much growth GM stock has experienced in only the past two weeks, with a lot of that growth taking place today following the Q3 earnings report.
It’s worth noting that GM stock saw a similar jump in growth following the release of its Q2 2019 earnings report. GM stock has been experiencing some ebb and flow ever since that point. If it were to maintain this trajectory, then it could easily break back into the $40.00 per share range by 2020. Shares rose by 2 percent last week as GM and UAW ratified the new labor agreement, marking the third consecutive week of growth for GM stock value.
The Detroit-based automaker’s stock recently took a hit as a result of the UAW strike. Luckily, the walkout has officially ended as a result of progress made in contract negotiations between The General and the UAW, wherein the UAW has voted to ratify the contract. Prior to the UAW-related turbulence, GM share values saw a three-week-long growth streak. GM said the total loss totals $1 billion or $2 per share for Q3 2019 earnings, for a total of $2.9 billion dollars between Q3 and Q4.
There are many other factors that are contributing to the recent dynamics in GM stock value, including the arrival of the next-generation, mid-engine Corvette. Also known as Corvette C8 or the 2020 Corvette, the vehicle was initially planned to launch towards the end of the fourth quarter, but the strike pushed the launch into January 2019. No matter, the C8 is expected to contribute very favorably to GM’s bottom line, as the Corvette carries very healthy profit margins. More than that, it also shows that GM is still very capable of designing, engineering and bringing to market world-class vehicles. In anticipation of strong customer demand, the company is increasing production of the new model, adding a second shift and more than 400 hourly jobs at the GM Bowling Green Assembly plant in Kentucky that assembles the Corvette.
It’s also worth noting that, earlier in the year, GM stock went unfazed by the delay in launching Cruise – GM’s upcoming robotaxi service. GM will spend the remainder of 2019, and likely most of 2020, carrying out more tests in San Francisco with its Chevrolet Bolt EV-based prototype vehicles, called the Cruise AV.