Mizuho increased its price target on General Motors, hours after the Detroit automaker released its fourth-quarter earnings results on Tuesday — revealing improved profitability while forecasting a strong 2026.
In a new research note, obtained by PriceTarget, Mizuho analyst Vijay Rakesh highlighted GM‘s 2026 earnings guidance, which was set above Wall Street expectations.
According to the analyst, the Detroit automaker guided to $14 billion in EBIT, nearly $2 billion above consensus expectations, along with EPS of $12.
It also set capital expenditures at $11 billion.
General Motors set adjusted EBIT earnings to stay between $13—15 billion, after the company reported $12.7 billion in 2025.
Additionally, Rakesh noted that GM expects North American internal combustion engine (ICE) sales to be “flat to up modestly” when compared to 2025 — in contrast with a projected 4% decline in the US auto market overall.
While the company expects average selling prices (ASP) to be “flat to up 0.5%,” the Japanese firm estimates an increase of around 1% year over year.
Headwinds
Mizuho, which has reiterated an Outperform rating on GM‘s stock, remains positive on the automaker due to “reduced tariff burden/risk” and “improved profitability.”
The company’s expected headwinds total around $6 billion this year, including $3.5 billion from tariffs — as GM expects an “additional quarter of tariff exposure,” according to its shareholder deck.
The remaining $2.5 billion is estimated to come from unavoidable market/price pressures and from strategic moves such as more US production and software investments.
According to Rakesh, these are partially offset by improving EV losses, lower warranty costs and a better product mix.
GM expects full-year EBIT adjusted margins in North America to be “back in the 8% to 10% margin range,” as reaffirmed by CEO Mary Barra in the earnings call.
Long-term upside drivers include improvements in software and the upcoming hands-free, eyes-off assisted-driving system, targeted for 2028.
Last October, General Motors announced that its upgraded ADAS would offer these capabilities with the Cadillac Escalade IQ EV in three years.
Upon announcing that timeline, the company also revealed that Google’s conversational Gemini AI would be integrated into its vehicles this year.
Dividend and Buyback Plans
Mary Barra said on Tuesday that GM‘s average annual free cash flow of $10 billion has enabled the company to raise its quarterly dividend by 20% and plan share repurchases in the future.
The automaker announced that its Board has recently approved a $6 billion share repurchase program.
CFO Paul Jacobson stated that this reflects the “confidence in our ability to generate strong future cash flows and underscoring our ongoing commitment to returning capital to shareholders.”
He added that GM has delivered “substantial shareholder value with our stock price appreciating more than 170% since late November 2023.”
New Price Target
Mizuho’s new target — which was increased by $5 to $105 — implies an upside potential of 21.6% based on Tuesday’s closing price of $86.38.
The shares closed up 8.8% from Monday and climbed as high as $87.31 during the session, marking a new record for the company’s stock.
Shares slid to a 2025 low of $41.28 in April amid global trade tensions before doubling by year-end.
