General Motors Companys (GM) second-quarter net income, reported on July 25th, outstripped market expectations, as a result of cost-cutting efforts. The results did not include losses from GMs business activity in Europe, which encompasses the companys German Opel and British Vauxhall brands. The auto maker also pledged to introduce production reductions during the second half of 2017 in order to cut back its US inventory of unsold vehicles.
General Motors shares closed lower for a fourth consecutive trading session on Tuesday. The stock went down 0.70% ($0.25) to $35.57, after touching an intraday low at $35.50, or a price level not seen since July 13th ($35.45). In the week ended on July 23rd the shares of the largest vehicle manufacturer in the United States lost 0.77% of their market value compared to a week ago, which marked the first drop in the past four weeks and also the largest one since the week ended on May 21st. The stock has pared its advance to 1.83% so far during the current month, following a 2.95% surge in June. The latter has been the first gain out of four months and also the best monthly performance since January. For the entire past year, General Motors shares added 2.44%.
As of June 30th, GM had a 105-day supply of vehicles compared to the 90-day supply it had expected in April. Additionally, the auto manufacturers US dealer inventories grew by 273 000 vehicles during the latest quarter compared to the same three-month period a year earlier.
According to GMs Chief Financial Officer Chuck Stevens, the company intends to reduce production in North America by 150 000 vehicles during H2 this year. He also stated that GM was set to reach its North American inventory objective of a 70-day supply, as an increase in second-half sales could facilitate such a scenario.
Meanwhile, General Motors net income was reported to have dropped to $2.4 billion ($1.60 per share) during the quarter ended on June 30th from $2.8 billion ($1.74 per share) during the same period of 2016.
GMs earnings, excluding special items, were reported at $1.89 per share. In comparison, the median analyst estimate had pointed to earnings of $1.69 per share.
The company has maintained its 2017 full-year earnings forecast of $6.00 to $6.50 per share.
On the other hand, total revenue was reported to have shrunk to $37 billion during the second quarter from $37.4 billion during the same period of 2016. In comparison, the median forecast by analysts had pointed to $40.1 billion in revenue.
30 000 fewer vehicles were sold during the latest quarter, with lower sales to rental car agencies weighing the most.
According to CNN Money, the 27 analysts, offering 12-month forecasts regarding General Motors stock price, have a median target of $39.70, with a high estimate of $52.00 and a low estimate of $31.00. The median estimate is an 11.61% surge compared to the closing price of $35.57 on July 25th.
The same media also reported that 15 out of 27 surveyed investment analysts had rated General Motors’ stock as “Hold”, while 10 – as “Buy”. On the other hand, 1 analyst had recommended selling the stock.
Daily and Weekly Pivot Levels
With the help of the Camarilla calculation method, todays levels of importance for the General Motors stock are presented as follows:
R1 – $35.63
R2 – $35.69
R3 (Range Resistance – Sell) – $35.75
R4 (Long Breakout) – $35.94
R5 (Breakout Target 1) – $36.15
R6 (Breakout Target 2) – $36.24
S1 – $35.51
S2 – $35.45
S3 (Range Support – Buy) – $35.39
S4 (Short Breakout) – $35.20
S5 (Breakout Target 1) – $34.99
S6 (Breakout Target 2) – $34.90
By using the traditional method of calculation, the weekly levels of importance for General Motors Company (GM) are presented as follows:
Central Pivot Point – $36.14
R1 – $36.56
R2 – $37.06
R3 – $37.48
R4 – $37.91
S1 – $35.64
S2 – $35.22
S3 – $34.72
S4 – $34.23