Key Takeaways
- Strong Q4 Results with Beat and Guidance Raise: GM reported adjusted EPS of $2.51 (beating estimates) and guided for 2026 adjusted EBIT of $13-15 billion, up from $12.7 billion in 2025.
- Shareholder Returns Boosted: 20% dividend increase to $0.18 quarterly, and a new $6 billion share repurchase program was approved.
- Tariffs and EV Challenges Persist: Tariffs cost $3.1 billion in 2025, with $3-4 billion expected in 2026; the EV strategy pivoted via capacity rightsizing and $6 billion charges.
- Mixed Analyst Views: While some upgraded targets post-earnings (e.g., TD Cowen to $122), others remain cautious due to tariff risks, EV losses, and economic uncertainties.
Introduction
The auto industry is navigating a bumpy road in 2026, with trade policies, shifting consumer demand, and the ongoing transition to electric vehicles creating both opportunities and headwinds. On January 27, 2026, General Motors (GM) released its Q4 2025 and full-year results, providing a clearer picture of where the company stands amid these challenges. Investors had been watching closely for signs of resilience in GM's core truck and SUV business, updates on its EV pivot, and the impact of tariffs on profitability.
GM delivered a mixed but ultimately positive report: an adjusted EPS beat, robust 2026 guidance, and generous capital returns to shareholders. The stock jumped, hitting all-time highs in the session following the release. Yet, some analysts continue to express caution, pointing to ongoing tariff pressures, EV-related charges, and broader economic risks.
This post dives deep into the earnings details, what investors should watch in 2026, why certain analysts have stepped back or stayed neutral on the stock, and how GM is positioning itself for long-term growth. Whether you're a current shareholder or considering GM stock, understanding these factors is key in a volatile market.
Note: Despite beating earnings expectations, GM reported a net loss. While adjusted EPS of $2.51 was a significant beat, the reported revenue of $45.3 billion came in slightly below the expected $45.8 billion. The massive $3.3 billion net loss this quarter highlights the high cost of GM’s transition, primarily driven by $7.2 billion in special charges related to the realignment of its electric vehicle business."
GM Q4 2025 Earnings Highlights
Financial Performance Overview
GM's Q4 2025 revenue came in at $45.3 billion, slightly below expectations of around $45.8 billion. However, adjusted EBIT reached $2.8 billion (6.3% margin), and adjusted diluted EPS hit $2.51, surpassing the $2.20 consensus. Full-year 2025 revenue was $185 billion (down 1.3% YoY), with adjusted EBIT at $12.7 billion and EPS at $10.60.
These results reflect strong demand for high-margin ICE vehicles, particularly full-size pickups and SUVs, where GM maintained leadership.
While adjusted EPS of $2.51 was a significant beat, the reported revenue of $45.3 billion came in slightly below the expected $45.8 billion. The massive $3.3 billion net loss this quarter highlights the high cost of GM’s transition and capacity adjustments.
Chevrolet Silverado and GMC Sierra continued to dominate, with full-size pickups seeing record or near-record sales.
2026 Guidance: Optimism Amid Headwinds
GM provided upbeat 2026 guidance:
- Adjusted EBIT: $13.0–15.0 billion
- Adjusted EPS: $11.00–13.00
- Adjusted automotive free cash flow: $9.0–11.0 billion
The midpoint suggests growth from 2025's $12.7 billion EBIT, driven by pricing discipline, warranty improvements, and EV loss reductions of $1-1.5 billion through capacity adjustments.
Share Buyback and Dividend Hike
GM's board approved a new $6 billion share repurchase program and raised the quarterly dividend by 20% to $0.18 per share. This follows $6 billion in buybacks in 2025 and underscores confidence in cash flow generation.
Impact of Tariffs on GM and US Automakers
Tariffs were a major headwind in 2025, costing GM $3.1 billion (mitigated over 40% through pricing and efficiencies). For 2026, the impact is expected to rise to $3-4 billion due to a full-year effect.
Broader auto sector tariffs could raise costs for imported parts and vehicles, potentially squeezing margins or leading to higher consumer prices.
ShareVault: M&A in 2025: Tariffs, Risks, and Solutions
Research from the Federal Reserve and IMF highlights how trade barriers can slow global growth, with the IMF forecasting moderate expansion in 2026, partly due to such policies.
GM's EV Strategy Pivot
GM took significant EV-related charges ($6 billion in Q4, mostly non-cash impairments) as it rightsized capacity—shifting the Orion plant to ICE production and discontinuing BrightDrop vans. This reflects slower-than-expected EV demand and a focus on profitability over aggressive expansion.
EV sales grew 48% YoY in 2025, with GM ranking #2 in the US, but losses persist. The pivot aims to align production with demand while advancing software and next-gen architecture.
A major part of this strategy is the pivot of the Orion Assembly plant. GM has decided to shift this facility back to producing ICE (Internal Combustion Engine) trucks to capitalize on current high-margin demand, a move that signals a more conservative approach to the EV transition.
Why Some Analysts Are Cautious on GM Stock
With GM stock hitting all-time highs and trading above $86 following the earnings beat, some analysts are moving their price targets toward $100 to $122 (e.g., TD Cowen). However, cautious analysts worry that at this valuation, the stock has already 'priced in' the $6 billion buyback, leaving little room for error if tariffs hit harder than expected.
Concerns include tariff escalation, commodity inflation, and EV transition costs. However, many view GM as undervalued relative to its cash returns and ICE strength.
Tariff Impact: Analysts are wary of the projected $3 billion to $4 billion tariff headwind for 2026.
Valuation Concerns: With the stock recently trading above $85, some experts believe the current price already reflects the positive news of the $6 billion buyback, leaving less room for immediate upside unless margins improve further.
GM Stock Analysis for 2026
GM stock reacted positively to earnings, reflecting optimism on guidance and capital allocation. Long-term success depends on navigating tariffs, improving EV margins, and sustaining truck leadership.
Mini Case Study: GM's Resilience in a Tariff-Heavy Environment
Similar to how Deere navigated trade tensions in prior years by adjusting supply chains and pricing, GM mitigated 40% of 2025 tariff costs through efficiencies. This positions it better than some peers for ongoing pressures.
Conclusion
GM's Q4 results and 2026 outlook highlight resilience in core operations and proactive adjustments. While tariffs and EV challenges warrant caution, the company's shareholder-friendly moves and guidance suggest upside potential.
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FAQs
What was GM's Q4 2025 EPS?
Adjusted EPS was $2.51, beating expectations.
What is GM's 2026 EBIT guidance?
$13-15 billion adjusted.
How much is the dividend increase?
20%, to $0.18 quarterly.
Why are some analysts cautious on GM?
Tariff risks, EV losses, and economic uncertainties.
What is the average GM stock price target for 2026?
Around $80-82, with some higher.
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