GM gets key update from Deutsche Bank ahead of earnings

While General Motors shares spent much of February and March on the downslope, the stock has been on a heater over the past couple of weeks, rising nearly 8% last week and more than 10% over the past month. Rising oil and gas prices are forcing Americans to make tough choices about major purchases such as cars. Still, analysts at Deutsche Bank see GM as well-positioned to weather several headwinds, so they upgraded the stock to buy from hold.GM shares closed the Friday, April 17, session at $81.32, and analysts at the firm say this is an "attractive entry point to gain exposure to a potential multi-year re-rate story. Near-term volatility can be attributed to geopolitical developments, but our thesis is built on GM’s operational resilience, which GM demonstrated multiple times in recent years," according to a note seen by TheStreet.But it's not all good news for GM, as last year's headwind is playing a big role in its earnings story this year. Tariffs are expected to eat up $800 million of GM's first-quarter EBIT.Pugliano/Getty Images GM raised to buy from hold at Deutsche BankGeneral Motors is scheduled to report its first-quarter earnings before the opening bell on April 28. Analysts at Deutsche Bank have a mostly positive outlook on the company's first quarter, but it won't be without headwinds. "Looking specifically at GM’s 1Q, we expect some deterioration in volume/mix relative to the prior year, though pricing should help to mitigate," the Deutsche Bank note says. While tariffs aren't in the headlines in 2026 like they were last year, tariff expenses are expected to be the company's biggest headwind, accounting for a negative $800 million hit in the quarter versus the company's own expectations between $700 million and $1 billion.Those expenses are expected to offset the tailwinds the company is expected to see in the quarter, including a $400 million improvement in EV losses, a $250 million improvement in warranty, and $200 million in emissions benefits. Deutsche Bank expects GM to report a first-quarter EBIT of $2.91 billion, a slight increase from its previous expectation of $1.85 billion but below Wall Street's consensus of $2.97 billion. "The key question for the 1Q call is how GM will manage its full-year guidance, considering the volatile macro backdrop (e.g., raw materials, supply chain, consumer sentiment)," the note says. "When we look at the drivers of YoY walk, many of the factors are more within GM’s control, including improvement in EV losses from capacity reduction, cost benefits from warranty, and regulatory benefit mainly due to the elimination of emissions compliance credits."So the firm is modeling its full-year EBIT guidance to the midpoint of GM's internal guidance at $14.1 billion, down from $14.5 billion previously. General Motors plans to buy back $6 billion in shares in 2026; raises dividendDespite billions in EV-related charges, GM plans to reward shareholders generously in 2026.On Jan. 27, GM shared that its board of directorsapproved a new $6 billion share repurchase program, as well as a 3-cent-per-share increase in its quarterly stock dividend to 18 cents per share. The new rate is payable March 19 to shareholders of record on March 6.The company says it wants to reward shareholders because its overall strategy is working.“For several years now, GM’s strong brands and winning vehicles, as well as our technology-driven services and operating discipline, have delivered consistently strong cash generation,” said Barra.“This has allowed us to execute all phases of our capital allocation strategy, from investing in the business and our people to maintaining a strong balance sheet and returning capital to shareholders. We believe that formula is sustainable, which is why we’re increasing our dividend and planning future share repurchases.”Related: GM exec explains how it beat tariffs in 2025