General Motors Co. (NYSE: GM) has followed up a strong quarter for its stock with a strong third-quarter earnings report on Tuesday morning. GM stock has generated some positive momentum in recent weeks following positive headlines about its autonomous vehicle technology. However, Tuesday’s report indicates GM’s core auto business is doing just fine.
GM reported third-quarter earnings per share of $1.32 on revenue of $33.6 billion. Both numbers topped consensus analyst estimates of $1.12 and $32.7 billion, respectively.
GM also reiterated its full-year EPS guidance of between $6 and $6.50.
[See: 7 Best Dividend Stocks to Buy for the Rest of 2017.]
Revenue in the third quarter was down 13.5 percent from a year ago, but that reduction was all part of GM CEO Mary Barra’s plan to reduce U.S. inventory levels. At the same time GM was dialing back U.S. production, GM upped its deliveries in China by 12.3 percent.
“We are managing the business to drive strong performance today, while investing in higher-return opportunities, including those that will shape the future of transportation,” Barra said.
Last month, Deutsche Bank analyst Rod Lache said GM may be in the lead in the driverless vehicle race.
“GM’s AVs will be ready for commercial deployment, without human drivers, much sooner than widely expected (within quarters, not years), and potentially years ahead of competitors,” Lache says.
Excitement about GM’s AV business sent GM stock soaring 27.8 percent in the past three months. However, UBS analyst Colin Langan recently said GM’s core business offers long-term investors tremendous value.
“While the stock has run following positive press around Cruise Automation, its autonomous car unit, the valuation still implies limited long-term value on the core auto business,” Langan said.
Even after the big recent run, GM stock still trades at a minuscule forward PE ratio of only 7.6, making it one of the best values in the entire Standard and Poors 500 index. GM also pays investors a generous 3.3 percent dividend yield while they wait on the AV era to begin.
[See: 7 Dividend Stocks to Watch.]
Deutsche Bank has a “buy” rating and $51 price target for GM stock. UBS has a “buy” rating and $50 price target for GM.
More from U.S. News
5 Automakers to Rev Up a Long-Term Investor’s Portfolio
6 Things to Know About Mark Zuckerberg’s Manifesto
The Top 10 Investment Portfolio for Millennials
General Motors Stock Climbs on Earnings Beat originally appeared on usnews.com
