GM - Embedded Expectations Analysis - 2018 06 15
General Motors Company (GM:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 17.4x Uniform P/E, implying somewhat bullish expectations for the firm. However, management has concerns about margins, autonomous vehicles, and costsSpecifically, management may lack confidence in the sustainability of EBIT adjusted margin at current levels, and may have concerns about their negative free cash flow resulting from incremental capital spending to support their new truck launches and GEM vehicles. Additionally, they may be concerned about their AV testing in New York and San Francisco, and may also be concerned about higher-than-expected commodity headwinds
General Motors designs, builds and sells trucks, crossovers, cars and automobile parts. The company also provides automotive financing services through its subsidiary, General Motors Financial Company, Inc. (GM Financial). GM Financial provides retail loan and lease lending across the credit spectrum. GM Financial provides commercial lending products to dealers including new and used vehicle inventory floorplan financing and dealer loans, which are loans to finance improvements to dealership facilities, to provide working capital, and to purchase and/or finance dealership real estate. Other commercial lending products include financing for parts and accessories, dealer fleets and storage centers.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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