GM – Market expectations are for Uniform ROA to remain muted, but management is confident about EBIT, pricing, and zero-emissions initiatives

• General Motors Company (GM:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 13.0x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain muted, but management is confident about their adjusted EBIT guidance, pricing strength, and zero-emissions initiatives.

• Specifically, management is confident they are raising 2021 adjusted EBIT guidance to $11.5 billion-$13.5 billion and they exceeded expectations by driving a strong price mix in North America. In addition, they are confident they have put tools in place to help dealers maintain supply of customer-desired vehicles. Furthermore, management is confident they are focused on investing in zero-emission solutions and their ability to temporarily build cars without modules is helping them navigate short-run supply pressures.