General Motors (GM) Stock: Why It Fell Despite a $20B Buyback

Oct 20, 2026: a beat and a buyback, but no raise

GM released its results at 6:30am ET. The stock traded mostly between $82.45 and $83.00 in early premarket trading, then dropped to $78.02 by 6:35am as the guidance sank in. It slid to $76.00 shortly after 8:05am, recovered to $77.80 by 8:50am, and opened the regular session at $77.22. It touched $76.55 in the first minutes, then climbed to $78.70 by 9:40am. At 9:48am it was $78.65, down 5.0%, on 3.8 million shares.

What pushed it down:

• No third raise. GM lifted its 2026 EBIT-adjusted range from $13 billion to $15 billion in January to $13.5 billion to $15.5 billion with first-quarter results, then to $14 billion to $16 billion in July, Just Auto reported. This time it cut the top of the range instead. Investing.com wrote that it dashed hopes for a third straight raise.
• A softer fourth quarter. GM earned $12.3 billion of EBIT-adjusted and $10.97 of adjusted EPS in the first nine months. The new ranges leave $2.2 billion to $3.2 billion of EBIT-adjusted and $1.78 to $2.78 a share for the fourth quarter. The consensus fourth-quarter estimate was $2.84.
• Costs. GM now expects commodity inflation of about $2 billion, the top of its earlier $1.5 billion to $2 billion range, including logistics and memory chip costs, Yahoo Finance reported. It cut its expected regulatory benefit to about $500 million from as much as $750 million. In her shareholder letter, CEO Mary Barra said GM is working to keep its momentum "despite growing inflationary pressures."
• Weaker U.S. volume. U.S. deliveries fell 5.5% in the quarter to about 671,000 vehicles, and market share slipped to 16.1% from 16.8%, Stocktwits reported. EV sales fell about 62%.

What held it up:

• The $20 billion buyback. It follows the $6 billion program GM finished this year and has no expiration date. Barra called buybacks "a proven strategy."
• More cash. Adjusted automotive free cash flow was $5.9 billion in the quarter, up 40%, and full-year guidance rose to $11.5 billion to $12.5 billion.
• A brighter 2027. Management said it expects 2027 to be better than 2026, provided demand holds and commodity, logistics and other cost pressures ease, Stocktwits reported.

The rest of the group barely moved, so the drop was about GM's own report. At 9:48am, from the Oct 19 close:

The S&P 500 ETF was down 0.1% at the same time. Tesla reports on Oct 21; our page on why Tesla stock fell last week covers its setup. For other names moving today, see today's biggest stock moves.

After the drop, RSI(14) stood near 40, the shares sat 6.6% below their 50-day average of $84.25 and 2.5% below their 200-day average of $80.69, volume by 9:48am was already 55% of its 20-day average of 6.8 million shares, and the stock was 14% below its 52-week high of $91.85.

The quarter, in numbers

North America did the work. Its margin rose to 8.7% from 6.2%, helped by GM's best third quarter ever for full-size pickups, while GM International and GM Financial both earned less. Analysts had expected adjusted EPS of $3.57, according to the Bloomberg consensus Yahoo Finance cited, or $3.69 in Investing.com's survey, and revenue near $48.5 billion to $48.8 billion.

The guidance moved like this:

Narrowing a range late in the year is normal. The problem is which half went away. For why the market reacts to an unchanged midpoint, see our explainer on guidance changes and why outlooks move stocks.

The case for the stock: the buyback and the cash

GM had 849 million shares outstanding on Sept 30, down from 904 million at the end of 2025, 995 million at the end of 2024 and 1.2 billion at the end of 2023. That is a 29% cut in under three years. At $78.65, the 849 million shares are worth about $66.8 billion, so the $20 billion authorization covers about 30% of the company. Our explainer on when buybacks act as catalysts covers why the pace matters more than the headline.

The valuation leaves room. The stock trades at about 5 times next year's expected earnings and 1.1 times book value, and short sellers hold only 2.3% of the float. Our guide to forward and trailing P/E explains why a low forward multiple in a cyclical industry is not proof of a bargain. The consensus price target is $102.33, with a range of $61 to $130.

Cash flow is the other support. Free cash flow guidance went up by $1.5 billion at the midpoint even as profit guidance held, and nine-month adjusted automotive free cash flow was $12.2 billion, against $7.8 billion a year earlier.

The risks

• The fourth quarter is guided down. Even the top of the new range implies $3.2 billion of fourth-quarter EBIT-adjusted, against $4.1 billion in the third.
• Costs are rising, and 2027 depends on them. GM's better 2027 hinges on commodity and logistics costs easing. Tariff costs are tracking toward the low end of a $2.5 billion to $3.5 billion range, Yahoo Finance reported, but that is still a large bill.
• Volume and share. U.S. deliveries fell 5.5% and share slipped 0.7 points. Pickups are strong, but EV sales have collapsed, and GM International earned just $28 million.

What comes next

1. Buyback execution. GM has not said how fast it will spend the $20 billion; the fourth-quarter share count will show it.
2. Cost updates. Any change to the $2 billion commodity estimate, or to tariff costs, before year-end.
3. Fourth-quarter results and the 2027 outlook, expected in late January 2027. The 2027 range is the real test of the view. Our guide to preparing for an earnings report covers what to check on the day.
4. Peer reports. Tesla reports on Oct 21, and the other automakers' third-quarter reports will show whether the cost pressure GM described is industry-wide.