For most of 2026, General Motors (GM) has been a stock that makes investors nervous. From tariff headlines, EV restructuring charges, a war in the Middle East pushing up raw material costs, and a share price that’s down year-to-date, even as the one-year return sits at an impressive 70%. Then came the first-quarter earnings report. And the narrative shifted.
GM delivered adjusted EPS of $3.70, well above the $2.62 consensus estimate (41% beat). EBIT-adjusted rose 22% year over year to $4.25 billion. An additional boost came from a Supreme Court of the United States ruling on IEEPA tariffs, which provided an unexpected $500 million tailwind. Management used that benefit to raise full-year guidance.
“Our EBIT-adjusted of $4.3 billion surpassed our expectations even after excluding a $500 million tariff adjustment,” CEO Mary Barra wrote in her letter to shareholders. “As we move forward, I’m confident this will continue to differentiate GM and support long-term value creation for our owners.”
Citi responded by raising its General Motors price target to $108 from $105, maintaining its Buy rating. It frames GM as a self-help story where margins are expanding even as volumes face pressure.
GM’s Q1 2026 earnings beat Wall Street on the metrics that matter most
The quarter’s strength wasn’t concentrated in one division or one accounting line. It was broad, according to GM’s April 28 earnings release:
- Revenue of $43.62 billion, down 0.9% year over year from $44.02 billion in Q1 2025.
- Adjusted EPS of $3.70 versus $2.62 consensus, a beat of more than $1 per share.
- EBIT-adjusted of $4.3 billion, up 22% year over year from $3.49 billion
- Net income attributable to stockholders of $2.6 billion.
Source: General Motors 2026 First-Quarter Results
The revenue miss relative to the prior year needs context. Volume declined, with global vehicle sales falling to 1.295 million units, while U.S. market share slipped to 16.5% from 17.2%. However, General Motors offset that softness through pricing discipline and cost management.
CFO Paul Jacobson told CNBC that the company got ahead of costs in a meaningful way during the quarter, noting that strong execution drove the earnings beat.
The company also declared a quarterly cash dividend of $0.18 per share, payable June 18, 2026, according to the earnings release.
Citi’s $108 target reflects confidence in the buyback-driven margin story
Citi’s bull case on General Motors is not primarily a volume story. It’s a capital efficiency story. The bank raised its price target to $108 from $105, maintaining a Buy rating, citing GM’s Q1 beat against a volatile geopolitical backdrop, improved financial performance, and a steadily declining share count driven by consistent buybacks.
GM repurchased $800 million in shares during Q1 alone, and the diluted share count has fallen to 926 million from 1,002 million, according to the earnings statement. That is a reduction that mechanically lifts EPS even when top-line volume faces headwinds.
Related: Citi flags a dangerous thought pattern hurting your investments
At $75.91, GM trades at approximately 6–7times earnings with a market cap of $68.4 billion, according to Yahoo Finance, a valuation that Citi’s $108 target suggests is significantly underpricing the margin expansion and capital return trajectory.
GM also raised its full-year 2026 adjusted EPS guidance to $11.50 to $13.50, with gross tariff cost estimates revised down from $3.0 billion to $4.0 billion range, to $2.5 billion to $3.5 billion, according to the earnings release. Automotive free cash flow guidance of $9 billion to $11 billion was held unchanged due to uncertainty around the timing of IEEPA tariff refunds.
Mary Barra’s shareholder letter reveals surprising strength
Strip away the tariff benefit, and the GM story is still a good one. Barra’s shareholder letter makes that case directly.
According to the shareholders’ letter, GM’s operational highlights included:
- Overall sales leadership was maintained in the U.S. and Canada.
- 42% share of the U.S. full-size pickup market, leading the industry.
- No. 1 in U.S. fleet and commercial deliveries.
- No. 2 in U.S. EV market share, with growing momentum despite restructuring charges.
- Sixth consecutive profitable quarter in China.
- Crossovers now exceeding 46% of GM sales, up from just over 40% in 2023.
Source: GM’s Q1 2026 Letter to Shareholders
The crossover expansion deserves attention. Models including the Chevrolet Trax, Equinox, Traverse, Buick Envista, and GMC Terrain and Acadia have become meaningful profit contributors, broadening GM’s earnings base and reducing dependence on the full-size truck franchise that has historically carried the company’s margin profile.
OnStar and Super Cruise are contributing to high-margin revenue growth, and GM is advancing automated driving technology as a longer-term differentiator, according to Barra’s letter.
The bear case on GM is real, and Barra acknowledged it directly
Citi’s optimism doesn’t eliminate the risks. And GM’s own CEO put them on the table.
“The war in Iran has raised our costs and its duration remains uncertain,” Barra told investors, according to CNBC. A candid acknowledgment that commodity inflation of $1.5 billion to $2 billion in 2026 remains a live variable. A $1.08 billion EV capacity realignment charge hit GAAP results in Q1, adding to $7.6 billion in EV-related special charges from 2025. GAAP net income of $2.6 billion was down year over year, even as adjusted results surged.
The full-size pickup changeover in the second half of 2026 is another variable to watch. GM’s truck franchise is the backbone of its North America margin. Any disruption to production or pricing discipline during the model transition could pressure the 8%-10% North America margin target that Barra committed to for the full year.
More Wall Street
General Motors’ stock is down 6.60% year-to-date, trailing the S&P 500’s 5.62% gain, according to Yahoo Finance. That marks a modest underperformance, especially when viewed against its one-year return of 69.90%, which significantly outpaces the index’s 29.17%.
If you are an investor comfortable with cyclical risk and confident in management’s track record of execution, Citigroup’s $108 price target suggests the current entry point could be compelling. The next earnings report and any developments around tariffs remain key catalysts to watch.
Related: JPMorgan adjusts General Motors stock price target after earnings
