GM Sparks Retail Optimism With 2025 Outlook And Q4 Beat, But Stock Tumbles After CEO Barra Flags Trump Tariff Risk

Shares of General Motors Co. plunged nearly 10% on Tuesday morning, set for their steepest decline since March 2020, as CEO Mary Barra's comments about regulatory risks under the Trump administration outweighed upbeat quarterly earnings and 2025 outlook.

GM's fourth-quarter (Q4) adjusted earnings per share (EPS) were $1.92, up from $1.24 a year ago, surpassing the $1.85 consensus estimate. Revenue rose nearly 11% to $47.70 billion, beating analysts' expectations of $44.98 billion.

For 2025, GM forecast adjusted EPS at $11–$12, exceeding analysts' estimates of $10.86. Revenue is projected to reach $13.7–$15.7 billion.

The guidance factors in reduced expenses of $500 million from scaling back Cruise self-driving operations and includes $10–$11 billion in capital spending, primarily for battery cell manufacturing.

In a CNBC interview, Barra revealed that she had a "long" and "productive" discussion with President Donald Trump, who plans to slap a 25% tariff on imports from Mexico and Canada from next month. 

Morgan Stanley analysts had earlier noted that a tariff of this magnitude could pose "outsized" risks for GM, as over 26% of its cars sold in the United States come from Mexico and 3% from Canada. 

Barra, however, reassured investors, citing the company's strong internal combustion and EV portfolios, but conceded that removing EV tax credits could hinder GM's 300,000-unit EV production target.

"You know, I think that that may have implications," she said.

GM sentiment and message volume Jan 28 as of 11 am ET | source: Stocktwits

Despite the broader market's negative response to Barra's comments,  sentiment on Stocktwits for GM turned 'extremely bullish' as retail traders focused on the fourth-quarter print and 2025 guidance.

Wedbush Securities reiterated its 'Outperform' rating with a $60 price target, calling GM's Q4 performance a "major step in the right direction" and praising the company's progress in balancing EV production, profitability, and traditional vehicle sales.

Morgan Stanley observed that GM "continues to execute well on the factors within its control" but warned that investors may see the optimistic 2025 outlook as a "bull case" contingent on a stable regulatory environment.

GM's stock has risen over 43% in the past 12 months, outpacing the S&P 500's 22% gain. However, the tariff concerns have introduced a layer of uncertainty that could weigh on investor sentiment in the short term.

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