General Motors Co. (NYSE:GM) CEO Mary Barra says that the company is not worried about its rivals offering incentives on their trucks, stressing the strengths of its products to drive sales.
GM Touts New Silverado and Sierra
During GM’s earnings call on Tuesday, Barra confirmed that the automaker was releasing the next-generation Chevrolet Silverado 1500 and the GMC Sierra 1500 light-duty pickup trucks.
Barra, when asked about the competition the automaker faces, expressed confidence about GM’s products and said that the competition was “here to stay.”
The CEO also pointed to one of its rivals offering “higher incentives for quite some time” and that it had been “years” since the rivals were offering discounts.
“We grew share with this truck, and we think we have a huge opportunity to, as we get past the launch, continue to grow share based on the strength of our product,” Barra said, talking about the latest truck release.
She also said that the strength of GM’s products, which have defied rivals’ high incentives and maintained sales in the segment, will help the company drive revenue from its software services like OnStar and Super Cruise.
Inventories Are Planned Well
GM’s Chief Financial Officer Paul Jacobson weighed in on the company’s inventories and its pricing strategies as GM prepared for a production downtime.
Jacobson weighed in on production transitioning to the next generation of the pickup trucks. “The sell-down of the existing truck is on track, with inventories at planned levels,” Jacobson said during the call.
He then said that the company’s incentives on the trucks were “several hundred basis points lower than prior truck changeovers.”
Jacobson’s comments touted the automaker’s broader price discipline that he said they had maintained over the years. “We expect to finish the year with overall inventory in our 50-60-day target range,” Jacobson said.
BNP Paribas Sees 45% Upside
Following GM’s earnings, French multinational bank BNP Paribas said that GM’s “modest” third-quarter miss, when compared to the bank’s own EBIT forecast of $4.26 billion vs reported EBIT of $4.11 billion, and EPS forecast of $3.74 vs reported EPS of $3.70, was tied to lower pricing due to incentives on trucks before the model changeover.
GM reported revenue rose 2.9% when compared to the same quarter last year to $50.02 billion, which was also ahead of the $48.53 billion market consensus.
BNP Paribas reiterated an ‘Outperform’ rating for GM and set a price target of $112 per share. Based on its current price of $77 per share during pre-market trading on Wednesday, the firm’s GM stock price target implies an upside of over 45%.
USMCA Remains Key
“While 3Q26 represented a break in GM’s “beat & raise” streak, we continue to see the Co. delivering consistently strong execution with a top-tier shareholder return yield,” the firm said.
BNP Paribas added that the company’s refreshed lineup of trucks and SUVs, as well as software and services growth, will help the automaker.
The bank then said that a new United States-Mexico-Canada Agreement (USMCA) is a “key area of upside to our forecast” and that it represented an annualized EBIT benefit of $500 million for the company.
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