GM(GM) ZACKS·2024-12-26 15:11Industry Overview - The US auto industry faced challenges in 2024, with affordability issues due to high interest rates and elevated vehicle prices, leading to a 2% year-over-year decline in third-quarter new vehicle sales [4] - Production forecasts for North American light vehicles were adjusted downward to 15.5 million units from 15.8 million as automakers implemented strategic production cuts to manage inventory levels [4] - S&P Global Mobility projects US auto sales volumes to reach 16.2 million units in 2025, reflecting a modest 1.2% increase from the estimated 2024 level [11] Large-Cap Auto Stocks - Large-cap stocks offer stability and reliability during market volatility, making them attractive for risk-averse investors [12] - These stocks provide a balanced blend of stability and growth potential, with established market presence, robust financials, and consistent performance [12] - Large-cap companies often prioritize shareholder returns through dividends and share buybacks, enhancing their appeal [12] Tesla (TSLA) - Tesla's 2025 revenue and earnings are expected to grow by 17.5% and 32% year-over-year, respectively, with EPS estimates for 2025 moving up 6 cents to $3.26 over the past 30 days [6] - The company is well-positioned to thrive without subsidies due to its cost efficiency and unmatched scale, with CEO Elon Musk forecasting 20%-30% growth in vehicle deliveries for 2025 [9] - Tesla's robust balance sheet supports continued innovation and expansion, with progress in autonomous vehicles and plans to launch robotaxi services in 2025 [14] General Motors (GM) - GM is advancing in its electrification journey, aiming to improve EV sales and profitability by reducing battery costs, introducing new models, and expanding scale [13] - The company is on track to achieve its $2 billion net cost reduction program by year-end and had total automotive liquidity of $40.2 billion as of Sept. 30, 2024 [16] - GM's 2025 earnings are expected to grow by 2.7% year-over-year, with EPS estimates for 2025 moving up 13 cents to $10.62 over the past 30 days [20] CarMax (KMX) - CarMax's fiscal 2025 and 2026 earnings are expected to grow by 4.3% and 22.2% year-over-year, respectively, with EPS estimates for current and next fiscal years moving up by 14 cents and 11 cents over the past seven days [17] - The company plans to open five new stores, launch a second reconditioning facility, and debut an offsite auction in fiscal 2025, with additional offsite reconditioning and auction locations planned for fiscal 2026 [21] - Strategic buyouts and omnichannel initiatives, including MaxOffer and an online appraisal tool, are driving growth in purchases and wholesale sales [18]