‘This Cash Flow Monster Isn’t Done Yet,’ Says Analyst on General Motors Stock (GM)

Stalwart U.S. car-maker General Motors (GM) stock is up more than 60% year to date, significantly outperforming the broader market and the S&P 500’s (SPX) 15% gain. The stock enjoyed a particularly strong November, accelerating away from industry averages on several fronts.

Despite that strong performance, I believe there is still room for further upside. GM continues to benefit from resilient North American demand for trucks and SUVs, meaningful cost savings from its $4 billion onshoring initiative, and easing tariff-related pressure across its supply chain. Taken together, these factors position the company well to continue generating strong cash flow and shareholder returns into 2026 and beyond.

GM’s recent financial performance reflects a clear reacceleration across revenue, cash flow, and profitability. Over the twelve months ending September 2025, net sales rose 2.6% year-over-year to $187.4 billion, supported by sustained strength in full-size pickups and SUVs, which remain the company’s highest-margin products. While electric vehicle volumes remain a relatively small share of total sales, early contributions from recent EV launches have begun to supplement results without undermining overall profitability. 

Cash Flow, Capital Discipline, and Shareholder Returns

GM continues to deploy its strong cash flow in a balanced and shareholder-friendly manner. As of September 2025, the company held $23.6 billion in excess cash, equivalent to approximately $25 per share. Combined with projected economic operating cash flow exceeding $30 billion over the next 12 months, GM has ample flexibility to fund growth initiatives, expand U.S. production, and return capital to shareholders.

A row of luxury GM Sierra trucks in Newfoundland, Canada (November 2025)

Capital expenditures for 2025 are expected to come in between $10 billion and $11 billion, reflecting a disciplined approach to balancing reinvestment with shareholder returns. Over the medium term, GM expects annual CapEx of $10–12 billion in 2026 and 2027, with spending focused on supply chain localization, U.S. onshoring, electrification, and software-defined vehicles. Notably, GM has already repurchased approximately $3.5 billion of stock year to date and continues to pay a consistent dividend, reinforcing management’s commitment to capital returns.

This disciplined capital allocation framework supports GM’s dual-engine strategy: harvesting cash from its highly profitable internal combustion engine business while selectively investing in EVs, software, and autonomy. Unlike peers that overbuilt EV capacity during peak enthusiasm, GM has demonstrated flexibility and pragmatism in adjusting its investment cadence to reflect actual demand trends.

Onshoring and Tariff Mitigation Strengthen the Earnings Profile

GM is investing approximately $4 billion between 2025 and 2027 to increase domestic production, mitigate tariff exposure, and improve supply chain resilience. This initiative is expected to offset roughly 35% of GM’s estimated $4–5 billion annual tariff exposure while expanding U.S. capacity beyond two million vehicles annually by 2027.

These investments span multiple facilities, including Orion Assembly in Michigan, Fairfax Assembly in Kansas, and Spring Hill Manufacturing in Tennessee. At Orion, GM will begin producing full-size SUVs and light pickup trucks in early 2027, shifting production away from Mexico and Canada. Fairfax Assembly will add Chevrolet Equinox production in mid-2027 and ramp up Bolt EV output by late 2025, while Spring Hill will expand production of the Chevrolet Blazer and Cadillac XT5 alongside existing EV programs.

This reshoring effort aligns with GM’s broader strategy to hybridize its manufacturing footprint, producing both gasoline and electric vehicles domestically while localizing supply chains. Beyond tariff mitigation, these moves should improve logistics efficiency, stabilize margins, and reinforce GM’s ability to meet exceptionally strong U.S. demand for trucks and SUVs. Heading into 2026, management remains focused on restoring North American EBIT margins to the historical 8%–10% range while continuing to improve EV margins and expand software and services.

A Pragmatic Approach to the EV Transition

As EVs are expected to represent only about 10% of the U.S. auto market in fiscal 2026, GM has taken a measured approach to managing its EV exposure. Rather than aggressively expanding capacity into a softening demand environment, the company has reduced its EV footprint by roughly 30% over the past quarter and reallocated resources toward high-demand, high-margin ICE vehicles. This stands in stark contrast to peers that have been forced into costly write-downs and abrupt strategy shifts.

GM’s decision to pivot production at the Orion plant from EVs back toward ICE vehicles highlights management’s willingness to prioritize profitability and cash flow over ideology. While EV profitability remains a long-term objective, GM’s current strategy emphasizes flexibility and optionality, enabling the company to scale EV production when demand and economics warrant. This approach has enabled GM to navigate the EV slowdown far more effectively than many competitors, preserving margins and free cash flow into 2026.

Despite its strong YTD performance, GM continues to trade at a meaningful discount to peers. With a P/E of over 8x and EV / Sales of ~1x, which are below the sector medians of 16.50 and 1.38, respectively.

Is General Motors (GM) a Buy, Sell, or Hold?

According to TipRanks, Wall Street sentiment toward GM remains constructive, with an average rating of “Strong Buy” based on 18 analysts’ views. The average price target of $79.72 implies approximately 3% downside for 2026. I attribute this to conservative assumptions rather than deteriorating fundamentals.

See more GM analyst ratings

Strengthening Fundamentals Support Bullish GM Case

General Motors has emerged from a volatile period with a stronger and more resilient business model. Solid demand for trucks and SUVs, disciplined capital allocation, effective tariff mitigation, and a pragmatic approach to electric vehicles have positioned the company to deliver sustainable cash flow and compelling shareholder returns. While the stock has already posted notable gains this year, GM’s improving fundamentals and still-undemanding valuation suggest further upside over time. Accordingly, I remain bullish on General Motors.