General Motors Company designs, builds, and sells trucks, crossovers, cars, and automobile parts; and provide software-enabled services and subscriptions worldwide. The company operates through GM North America, GM International, Cruise, and GM Financial segments. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling brand names. In addition, the company sells trucks, crossovers, cars, and automobile parts through retail dealers, and distributors and dealers, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. Further, it offers range of after-sale services through dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories, and extended service warranties. Additionally, the company provides automotive financing; and software-enabled services and subscriptions. General Motors Company was founded in 1908 and is headquartered in Detroit, Michigan.

For General Motors, the valuation looks like a compromise between very cheap multiples and noticeably weakened profitability. P/S, P/B, and especially P/FCF are significantly below the industry median, which usually supports the case for undervaluation and limits the potential for a sharp downside to the target. However, P/E is already above the median, which means the market is paying not for current profitability but for expectations that it will be sustained, and here the fundamental base looks weaker. Return on capital and assets remains low: ROE, ROA, ROI, and return on tangible equity are significantly below industry benchmarks and have also deteriorated noticeably compared with stronger levels at the beginning of the year. Margins have also declined: gross margin, operating margin, and net profit margin are far below the median, and their 5-quarter trend points to a compression in business efficiency. From a leverage standpoint, the picture is tense: debt/equity is materially above the industry level, while long-term debt remains very large relative to equity, increasing sensitivity to interest rates and the cycle. Liquidity looks acceptable, but not comfortable: the quick ratio is around 1, and the current ratio is only slightly above 1, leaving limited buffer. At the same time, revenue and absolute profit remain large, and EBITDA and net income show that the business is generating cash flow and remains profitable, although the quality of those profits does not look high. Dividend yield is currently absent, and in prior periods it was low and declining, so the dividend factor does not support a re-rating. Overall, this is not a story of strong valuation expansion, but rather a case where cheap asset-based multiples are partly offset by weak operating returns and high leverage. For an investor, this means a moderately cautious view: fair value may be somewhat below the current tactical reference point, since the fundamentals do not confirm aggressive upside. At the same time, the scale of the business and the low P/S, P/B, and P/FCF do not justify pricing in a deep negative revaluation.

General Motors Company

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, без изменений. Рынок на стороне быков.

Strong index, flat. The market is on the bulls' side.

Средний индекс, незначительно вырос. Приток средств в лонги остается положительным.

Medium index, slightly up. The inflow of funds into longs remains positive.

Cheap P/S, P/B, and P/FCF support GM’s valuation, but weak profitability, high leverage, and declining margins limit the upside.

General Motors GM) and Ford Motor F) have both delivered better-than-expected second-quarter results, reinforcing the resilience of Detroit's legacy automakers despite a challenging backdrop that includes tariffs, slowing EV demand, and elevated interest rates.
Better pricing, disciplined cost controls, and continued strength in trucks and SUVs helped both companies top Wall Street's expectations while raising their full-year outlooks.
Following their upbeat Q2 reports, investors may be wondering whether the recent rally in both stocks has further room to run, with GM spiking 18% this month and F up 11%.
Image Source: Zacks Investment Research
GM Continues to Execute at a High Level
Reporting Q2 results last week, General Motors once again demonstrated why it has become one of the auto industry's most consistent earnings performers.
General Motors reported Q2 revenue of $48.02 billion, up nearly 2% year over year and comfortably exceeding estimates of $46.55 billion by 3%.
More impressively, Q2 adjusted EPS of $3.57 soared 41% from earnings of $2.53 per share in the prior year quarter and crushed expectations of $3.13.
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GM raised its full-year guidance for the second time this year across several key metrics, increasing its adjusted EBIT (Earnings Before Interest and Taxes) outlook to a range of $14 billion to $16 billion, raising its adjusted EPS guidance to $12 to $14, and boosting its adjusted automotive free cash flow forecast to between $9.5 billion and $11.5 billion.
Operationally, North America remained the primary profit engine. GM generated an impressive 8.6% adjusted EBIT margin in the region, benefiting from continued demand for its full-size pickup trucks and SUVs, disciplined pricing, lower warranty costs, and improving EV profitability. Management also highlighted record adoption of its Super Cruise driver-assistance technology and improving efficiency across its manufacturing footprint.
These results suggest GM's strategy of balancing traditional internal combustion vehicles with a more measured EV transition is paying off. It’s also noteworthy that in the current global automotive landscape, a healthy EBIT margin for an automaker is generally considered to be in the low single digits.
Illustrating strong operational profitability and efficiency, GM’s trailing 12-month EBIT margin is at an industry-leading 5.78%, with Ford’s being roughly on par with the Zacks Automotive-Domestic Industry average of 2.81%.
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Ford Delivers an Encouraging Quarter
Ford also impressed investors with an earnings beat and a higher full-year outlook after reporting Q2 results yesterday evening.
Adjusted EPS came in at $0.42, rising from $0.37 per share a year ago and beating expectations of $0.33 by 27%.
Ford's operational performance remained encouraging, as adjusted EBIT climbed 17% YoY to $2.5 billion, highlighting the benefits of stronger pricing, a favorable product mix, and improving cost discipline.
This was despite Q2 revenue of $44.89 billion falling from $46.94 billion in the prior year quarter and missing estimates of $45.71 billion. That said, the company capitalized on a richer mix of high-margin trucks and SUVs while improving cost controls amid slower volume sales, which were attributed to discontinued vehicle models such as the Ford Escape.
Ford raised its full-year adjusted EBIT forecast to $10 billion-$11 billion, up from $8.5 billion-$10.5 billion, while also increasing its free cash flow outlook by roughly $1 billion to a range of $10 billion-$11 billion. Managment cited improving U.S. vehicle pricing, recovering aluminum supplies, and expected tariff refunds as key drivers behind the stronger outlook.
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GM & Ford Valuation Comparison
Despite their impressive rallies, both stocks remain inexpensive compared to the broader market.
GM continues to trade at a significant discount to the S&P 500, offering one of the lowest forward earnings multiples among large-cap industrial companies at 6X. Given General Motors improving earnings outlook, expanding margins, and strong free cash flow generation, that discount may prove difficult to justify if execution remains consistent.
Ford is also attractively valued at 9X forward earnings, although the market appears to be assigning a modest premium relative to GM because of its improving profitability and generous shareholder returns.
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To that point, Ford's dividend remains an added attraction for income-oriented investors at 4.01% compared to GM’s 0.8%. Still, GM's accelerating earnings growth and aggressive share repurchases have arguably created greater shareholder value in recent years.
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Conclusion & Final Thoughts
GM and Ford both demonstrated that legacy automakers can still generate impressive earnings growth despite ongoing uncertainty surrounding tariffs, EV demand, and the broader economy.
For investors seeking the stronger combination of earnings momentum, improving profitability, and an attractive valuation, GM appears to have the edge following its impressive Q2 performance and second guidance increase of the year.
However, Ford's raised outlook, improving execution, and shareholder-friendly capital return strategy continue to make it an appealing long-term investment as well.
Supported by improving fundamentals and continued upward earnings estimate revisions, GM stock currently sports a Zacks Rank #2 (Buy), while Ford shares land a Zacks Rank #3 (Hold).
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Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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GM vs. Ford Stock: Which Auto Giant Is the Better Buy After Q2 Earnings?

Cummins Inc. CMI is slated to release second-quarter 2026 results on Aug. 4, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share (EPS) and revenues is pegged at $7.33 and $9.33 billion, respectively.
For the second quarter, the consensus estimate for Cummins’ earnings has moved down 15 cents over the past 30 days. Its bottom-line estimates imply growth of 14% from the year-ago reported numbers.
The Zacks Consensus Estimate for CMI's quarterly revenues implies a year-over-year rise of 7.9%. The company's earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 17.15%. This is depicted in the graph below:
Cummins Inc. Price and EPS Surprise
Q1 Highlights
Cummins delivered adjusted earnings of $6.15 per share in the first quarter of 2026, which increased 3.2% year over year and 9.8% above the Zacks Consensus Estimate. Revenues of $8.40 billion rose 2.7% from the year-ago quarter and topped the consensus mark by 0.9%. The quarter reflected solid execution in key end markets, highlighted by an adjusted EBITDA margin of 17.7% of sales.
Things to Note
Cummins continues to benefit from rising demand for backup power in data centers and other mission-critical settings, which is supporting the Distribution and Power Systems segments. In first-quarter 2026, Distribution revenues increased and Power Systems delivered record EBITDA dollars, reflecting higher volumes, pricing and operational execution, because of which the company raised its full-year 2026 outlook for the Distribution and Power Systems segments.
The company now expects Distribution revenues to grow 9-14%, up from the previous estimate of 5-10%. CMI expects Power Systems revenues to grow 14-19%, up from the previous estimate of 12-17%. It also lifted Power Systems & Distribution EBITDA margin guidance to about 25-26% and 13.7-14.7%, up from the previous estimate of 23-24% and 13.25-14.25%, respectively.
For full-year 2026, the company also increased its Engine business revenue growth forecast to 7-12% compared with its earlier outlook of flat to 5% growth. It raised its EBITDA margin projection to a range of 12.5-13.5%, representing a 50-basis-point increase at the midpoint. It has raised its forecast for the Components business for 2026 and expects revenues now to be up 5% to 10%, up from prior guidance of flat to up 5%. The stronger outlook is primarily supported by improved expectations for North America heavy- and medium-duty truck demand, particularly in the first half of the year.
Expected growth across Distribution, Power Systems, Engine and Components segments in full-year 2026 is likely to have boosted Cummins’ performance in the second quarter.
Let’s have a look at our estimates for CMI’s segmental performance.
We expect Engine revenues to be $3.22 billion, suggesting an 11.2% year-over-year increase. For the Power Systems segment, we project sales of $2.1 billion, indicating an 11.2% year-over-year increase. We expect Components sales to be $2.67 billion, suggesting a decline of 1.5% year over year. For the Distribution segment, we project sales of $3.3 billion, indicating a 7.5% year-over-year increase. We expect Accelera revenues to be $71 million, implying a 32.4% year-over-year decline.
Our estimate for the Engine segment’s EBITDA is $454 million, which suggests a rise of 13.6% year over year. We expect the Power Systems segment’s EBITDA to be $519 million, suggesting a rise of 20.7% year over year. Our estimate for the Component segment’s EBITDA is pegged at $385.9 million, suggesting a decline of 2.8% year over year. We expect the Distribution segment’s EBITDA to be $485.9 million, indicating a 9.2% year-over-year decline.
Earnings Whispers
Our proven model predicts an earnings beat for Cummins for the quarter to be reported, as it has the right combination of the two key ingredients. A positive Earnings ESP, combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This is the case here.
Earnings ESP: CMI has an Earnings ESP of +0.78%. This is because the Most Accurate Estimate is pegged higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings Releases From Auto Space
General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.
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Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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Cummins Gears Up to Report Q2 Earnings: What's in the Cards?

Asbury Automotive Group ABG reported second-quarter 2026 adjusted earnings of $6.82 per share, which declined 8.2% year over year but exceeded the Zacks Consensus Estimate of $6.30 by 8.25%. The bottom-line beat reflected stronger used-vehicle profitability despite weaker new-vehicle margins. Revenues of $4.38 billion rose 0.3% from the prior-year quarter but missed the consensus mark of $4.46 billion by 1.78%.
Asbury Automotive Group, Inc. Price, Consensus and EPS Surprise
ABG's Revenue Mix
New-vehicle revenues increased 1% year over year to $2.33 billion, while used retail revenues declined 3% to $1.09 billion. Wholesale used-vehicle revenues fell 9% to $141.9 million, leaving total used-vehicle revenues down 4% at $1.24 billion.
Parts and service revenues advanced 6% to $634.6 million, while finance and insurance revenues edged up 1% to $183.8 million. The revenue mix shifted modestly toward parts and service, which represented 14.5% of total revenues compared with 13.8% a year earlier.
Asbury's Vehicle Economics
New-vehicle unit sales were nearly flat at 44,245 units. Luxury and import sales increased 6% and 5%, respectively, but domestic unit sales declined 15%. The average new-vehicle selling price rose 2% to $52,666. Despite the pricing gain, new-vehicle gross profit fell 14% to $138.2 million as gross profit per unit declined 13% to $3,124.
Used retail unit sales decreased 9% to 33,098, while the average selling price increased 6% to $33,054. Used retail gross profit rose 6% to $66.2 million, supported by the 16% improvement in gross profit per unit. Wholesale gross profit dropped 54% to $3.1 million.
Parts and service gross profit increased 5% to $374.2 million, making it the company’s largest gross profit contributor. Finance and insurance gross profit rose 2% to $171.4 million, with gross profit per vehicle retailed increasing 6% to $2,216.
Total gross profit was $753.1 million, essentially flat year over year, while gross margin remained at 17.2%.
ABG's Same-Store Operations Remain Soft
Same-store revenues declined 7% to $3.76 billion, while same-store gross profit decreased 7% to $643.2 million.
New-vehicle unit sales fell 6% to 38,908, and used retail unit sales declined 14% to 28,821.
Same-store new-vehicle gross profit per unit dropped 18% to $2,896. In contrast, used retail gross profit per unit increased 10% to $1,927, and finance and insurance gross profit per vehicle retailed rose 5% to $2,214. Same-store parts and service gross profit declined 1% to $322.8 million.
Other Tidbits
Selling, general and administrative expenses rose 7% to $506.4 million. Adjusted SG&A increased 4% to $496.7 million and represented 66% of gross profit, compared with 63.6% in the year-ago quarter.
Income from operations declined 15% to $219.5 million. Adjusted operating margin contracted to 5.3% from 5.8%, while adjusted EBITDA decreased to $234.8 million from $255.8 million. The results reflected higher expenses and weaker new-vehicle economics.
The company generated $305.2 million of adjusted operating cash flow during the first half of 2026 and reported adjusted free cash flow of $188 million. It ended June with $966 million of liquidity and a transaction-adjusted net leverage ratio of 3.4 times.
ABG repurchased about 668,000 shares for $131 million during the quarter. Year to date, it bought back roughly 1.35 million shares for $278 million, leaving approximately $322 million under its authorization.
Asbury currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Asbury Advances Its Tekion Rollout
Asbury had converted 70% of its stores to the Tekion dealership management system as of July 28 and expects to complete the rollout in fall. Management noted stronger productivity, customer-pay performance, technician efficiency and sales effectiveness in markets that had used the platform for at least five months.
In June, the Koons, Georgia and Florida stores increased average units per salesperson by 12% and dollars per technician by 10%. Management expects the platform to support better operating efficiency and is targeting same-store adjusted SG&A as a percentage of gross profit in the low-60% range by the end of 2027.
Key Releases From the Auto Space
General Motors GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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ABG Q2 Earnings Beat on Used-Vehicle Gains, Revenues Miss

Ford F reported second-quarter 2026 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 33 cents by 27.27%. Earnings rose 13.5% from 37 cents a year ago. Favorable mix and net pricing helped lift adjusted EBIT by 17% to $2.5 billion, while adjusted EBIT margin expanded to 5.2% from 4.3%.
Automotive revenues of $44.89 billion fell 4.4% year over year and missed the consensus mark of $45.72 billion by 1.81%. The company’s consolidated second-quarter revenues came in at $48.3 billion, down 3.7% year over year.
Ford Benefits From Stronger Mix and Pricing
Wholesale units declined 12% year over year to 1,039,000, reflecting product discontinuations, aluminum supply constraints and lower Gen-1 electric vehicle volumes. The lower volume base pressured the top line, but Ford’s focus on higher-value products supported profitability.
Strong mix and net pricing were the main contributors to the quarter’s EBIT improvement. Off-road vehicles accounted for nearly one-fourth of U.S. sales, while the Bronco family posted record second-quarter sales.
Ford Motor Company Price, Consensus and EPS Surprise
Ford Blue Posts Sharp Profit Growth
Ford Blue revenues increased 1% year over year to $26.1 billion despite an 8% decline in wholesales to 639,000 units. Segment EBIT climbed 72% to $1.135 billion, while the EBIT margin improved to 4.4% from 2.6%.
The gain reflected favorable product mix, higher net pricing and disciplined channel management. Explorer and Expedition retail sales rose 22%, while the off-road mix increased more than four percentage points in the quarter.
Ford Model e Narrows Its Operating Loss
Ford Model e revenues plunged 56% year over year to $1 billion as wholesales fell 53% to 28,000 units. However, the segment’s EBIT loss narrowed 31% to $919 million, marking a third consecutive quarter of year-over-year improvement.
Structural cost reductions, right-sized Gen-1 volumes and lower U.S. incentives aided results. Management expects Gen-1 EBIT to improve about 40% in 2026 as it continues investing in the Universal Electric Vehicle platform and Ford Energy.
F Pro Results Affected by Aluminum Supply Pressure
Ford Pro revenues declined 5% year over year to $17.8 billion as wholesales fell 13% to 372,000 units. Segment EBIT dropped 26% to $1.718 billion, and the EBIT margin narrowed to 9.7% from 12.3%.
Temporary Novelis-related aluminum constraints weighed on Super Duty production. Ford expects to recover postponed fleet orders in the second half, with additional capacity from the Oakville facility supporting improved availability.
On the brighter side, total paid subscriptions grew about 50% to roughly 1.6 million, including more than 900,000 Ford Pro Intelligence subscriptions. BlueCruise paid subscriptions rose 20% and represented half of retail integrated-services revenues.
Other Tidbits
Ford Credit generated pretax earnings of $757 million, up $112 million from the prior-year quarter. The improvement reflected a strong financing margin, a high-quality portfolio and disciplined capital and risk management.
Operating cash flow totaled $4.3 billion, while adjusted free cash flow was $2.1 billion. Ford ended the quarter with $22.3 billion in cash and $43.4 billion in total liquidity.
The company reported a GAAP net loss of $1.3 billion, including a $3.6 billion largely non-cash charge tied to the BlueOval SK joint venture disposition. Ford also declared a regular quarterly dividend of 15 cents per share.
Ford currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
F Raises Full-Year 2026 Guidance
Ford raised its full-year adjusted EBIT outlook to $10-$11 billion from $8.5-$10.5 billion. It also increased adjusted free cash flow guidance to $6-$7 billion from $5-$6 billion, while keeping capital spending at $9.5-$10.5 billion.
By segment, Ford now expects Ford Blue EBIT of $5-$5.5 billion, Ford Pro EBIT of $7-$7.5 billion, a Model e loss of about $4 billion and Ford Credit pretax earnings above $2.5 billion. The outlook assumes a U.S. SAAR of 16-16.5 million units and about $1 billion in material and warranty cost reductions.
Other Key Releases From the Auto Space
General Motors GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected to be $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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Ford Q2 Earnings Beat on Pricing & Mix, 2026 EBIT & FCF View Raised

For Immediate Release
Chicago, IL – July 29, 2026 – Stocks in this week’s article are Harmony Biosciences Holdings HRMY, Invesco IVZ, General Motors GM, Hewlett Packard Enterprise HPE and Quanex Building Products NX.
5 Undervalued Price-to-Book Stocks Worth Adding to Your Portfolio
Price-to-book ratio, or P/B ratio, is essentially the ratio of stock price to book value, i.e., how much an investor needs to pay for each dollar of book value of a stock. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.
In value investing, it is a common practice to pick stocks that are cheap but fundamentally strong. There are a number of investment styles for finding great stocks at attractive values.
While considering valuation metrics, though price-to-earnings and price-to-sales are the first choices, the P/B ratio is also emerging as a convenient tool for identifying low-priced stocks that have high-growth prospects.
Here’s the formula of P/B ratio:
P/B ratio = market capitalization/book value of equity.
This metric can help identify attractively priced stocks with upside potential. Some such stocks are Harmony Biosciences Holdings, Invesco, General Motors, Hewlett Packard Enterprise and Quanex Building Products. Let us understand the concept of book value.
What Is Book Value?
There are several ways in which book value can be defined. Book value is the total value that would be left over, according to the company’s balance sheet, if it went bankrupt immediately. In other words, this is what shareholders would theoretically receive if a company liquidated all its assets after paying off all its liabilities.
It is calculated by subtracting total liabilities from the total assets of a company. In most cases, this equates to common stockholders’ equity on the balance sheet. However, depending on the company’s balance sheet, intangible assets should also be subtracted from total assets to determine book value.
Book Value Per Share = (Total Assets – Total Liabilities) ÷ Number of Outstanding Shares
Understanding P/B Ratio
By comparing the book value of equity to its market price, we get an idea of whether a company is under- or overpriced. Like P/E or P/S ratios, it is always better to compare the P/B ratio within industries.
A P/B ratio of less than one means that the stock is trading at less than its book value or the stock is undervalued and, therefore, a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.
For example, a stock with a P/B ratio of 2 means that we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.
But there is a warning. A P/B ratio of less than one can also mean that the company is earning weak or even negative returns on its assets or that the assets are overstated. In such a case, the stock should be shunned because it may be destroying shareholder value. Conversely, the stock’s price may be significantly high — thereby pushing the P/B ratio to more than one — in the likely case that it has become a takeover target, a good enough reason to own the stock.
Moreover, the P/B ratio is not without limitations. It is useful for businesses like finance, investments, insurance and banking or manufacturing companies with many liquid/tangible assets on the books. However, it can be misleading for firms with significant R&D expenditure, high debt, service companies, or those with negative earnings.
In any case, the ratio is not particularly relevant as a standalone number. One should analyze other ratios like P/E, P/S and debt to equity before arriving at a reasonable investment decision.
Here are five of the 16 stocks that qualified for the screening:
Delaware-based Harmony Biosciences is a neuroscience company developing and commercializing therapies for sleep/wake disorders and rare neurological diseases.
Harmony Biosciences currently has a Value Score of A and a Zacks Rank #1. HRMY has a projected 3-5-year EPS growth rate of 32.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Atlanta, GA, Invesco Ltd. operates as an independent investment manager and offers a wide range of investment products and services.
IVZ has a Zacks Rank #2 and a Value Score of A. Invesco has a projected 3-5-year EPS growth rate of 22.02%.
Detroit, MI-based General Motors is one of the world’s largest automakers. General Motors, along with its strategic partners, produces, sells and services cars, trucks and parts under four core brands — Chevrolet, Buick, GMC and Cadillac. General Motors assembles passenger cars, crossover vehicles, light trucks, sport-utility vehicles, vans and other vehicles.
GM currently has a Zacks Rank #2 and a Value Score of A. The company has a projected 3-5-year EPS growth rate of 16.5%.
Headquartered in Houston, TX, Hewlett Packard Enterprise is a global enterprise technology company. It provides hardware, software and services that help businesses store, process and manage data across on-premise, cloud and edge environments. The company serves enterprises, governments, telecom operators and financial institutions in more than 150 countries.
Hewlett Packard currently has a Zacks Rank #1 and a Value Score of B. The company has a projected 3-5-year EPS growth rate of 32.0%
Houston, TX-based Quanex Building Products is an industry-leading manufacturer of components sold to original equipment manufacturers in the building products industry.
NX currently has a Value Score of A and a Zacks Rank #2. Quanex Building Products has a projected 3-5-year EPS growth rate of 14.0%.
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Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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Zacks.com featured highlights include Harmony Biosciences, Invesco, General Motors, Hewlett Packard and Quanex Building

Gentex Corporation GNTX reported second-quarter 2026 adjusted earnings of 58 cents per share, beating the Zacks Consensus Estimate of 50 cents by 16%. Earnings rose 16% from the year-ago quarter. Revenues, however, declined 1% year over year to $651.3 million and missed the consensus mark of $669 million by 2.6%.
Profitability stemmed from favorable product mix, disciplined cost management and tariff reimbursements. Non-automotive revenues accounted for about 14% of quarterly sales, helping offset weaker automotive demand and lower mirror shipments.
Gentex Corporation Price, Consensus and EPS Surprise
Gentex's Segmental Performance
Automotive net sales fell to $560.1 million from $578.1 million a year earlier. The decline reflected lower light-vehicle production and reduced shipments of base auto-dimming mirrors. Strength in North America, new technology launches and higher content per vehicle partly cushioned the pressure.
Total auto-dimming mirror shipments decreased 10% year over year to 10.4 million units. North American mirror shipments rose 6%, supported by gains in both interior and exterior products. However, international shipments declined 18%, including a 26% drop in international interior mirrors. China revenues fell about 20% amid tariff-related market disruptions.
Premium Audio revenues increased 16% year over year to $51.7 million. Growth was driven by the Powered Systems and Onkyo brands, supported by new product launches and continued demand across premium audio categories.
Other Products revenues rose 12% to $39.4 million. Aerospace products, biometric solutions and accessories supported the improvement, while automotive aftermarket sales remained a partial offset. The gains demonstrated Gentex’s progress in reducing its reliance on the traditional automotive mirror business.
Gentex's Gross Margin Expands
Gross margin increased 280 basis points year over year to 37%. The company recorded an approximately $18 million benefit from IEEPA tariff reimbursements that lowered the cost of goods sold. Favorable product mix also helped, partly offset by higher commodity costs and reduced sales volumes.
Adjusted operating expenses totaled $99.3 million, up from $97.5 million. Adjusted operating income advanced to $141.7 million from $130.3 million, while adjusted net income attributable to Gentex increased to $122.9 million from $110.9 million. Margins improved sequentially even after excluding the tariff benefit.
GNTX Generates Stronger Free Cash Flow
Preliminary operating cash flow increased to $180.9 million from $166.1 million in the prior-year quarter. Capital expenditures declined to $19.2 million from $31.1 million, helping free cash flow climb 20% to $161.7 million.
Cash and cash equivalents totaled $233.4 million as of June 30, 2026, compared with $145.6 million at the end of 2025. Gentex repurchased 2.7 million shares for $66 million during the quarter. Year-to-date repurchases totaled 5.9 million shares for $137.6 million.
Gentex Lifts 2026 Gross Margin Target
Gentex maintained its 2026 revenue guidance of $2.65-$2.75 billion. However, the company raised its gross margin outlook to 34.5%-35.5% from 34%-35%, reflecting stronger operating execution and the tariff-related benefit.
The company lowered its operating expense forecast to $405-$415 million from $410-$420 million. It also reduced its projected tax rate to 16%-17% and capital expenditure guidance to $115-$125 million. The 2027 revenue forecast was reaffirmed at $2.8-$2.9 billion.
GNTX Advances New Technology Programs
Gentex continued expanding its Full Display Mirror portfolio, with new launches on vehicles from Jeep, Infiniti, McLaren, Toyota and Subaru. Driver and in-cabin monitoring systems also began shipping on new BMW and Kia programs. Management expects these products to contribute more meaningfully during the second half of 2026.
The company is establishing a manufacturing facility in Morocco to support European customers, with production targeted for 2028. Gentex also expects to secure its first advanced electronics contract-manufacturing award, potentially representing a $100-$200 million revenue opportunity, with production planned for late 2028 or early 2029.
Gentex currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From the Auto Space
General Motors GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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Gentex Q2 Earnings Beat on Favorable Mix and Cost Control

Price-to-book ratio, or P/B ratio, is essentially the ratio of stock price to book value, i.e., how much an investor needs to pay for each dollar of book value of a stock. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.
In value investing, it is a common practice to pick stocks that are cheap but fundamentally strong. There are a number of investment styles for finding great stocks at attractive values.
While considering valuation metrics, though price-to-earnings and price-to-sales are the first choices, the P/B ratio is also emerging as a convenient tool for identifying low-priced stocks that have high-growth prospects.
Here’s the formula of P/B ratio:
P/B ratio = market capitalization/book value of equity.
This metric can help identify attractively priced stocks with upside potential. Some such stocks are Harmony Biosciences Holdings HRMY, Invesco IVZ, General Motors GM, Hewlett Packard Enterprise HPE and Quanex Building Products NX. Let us understand the concept of book value.
What is Book Value?
There are several ways in which book value can be defined. Book value is the total value that would be left over, according to the company’s balance sheet, if it went bankrupt immediately. In other words, this is what shareholders would theoretically receive if a company liquidated all its assets after paying off all its liabilities.
It is calculated by subtracting total liabilities from the total assets of a company. In most cases, this equates to common stockholders’ equity on the balance sheet. However, depending on the company’s balance sheet, intangible assets should also be subtracted from total assets to determine book value.
Book Value Per Share = (Total Assets – Total Liabilities) ÷ Number of Outstanding Shares
Understanding P/B Ratio
By comparing the book value of equity to its market price, we get an idea of whether a company is under- or overpriced. Like P/E or P/S ratios, it is always better to compare the P/B ratio within industries.
A P/B ratio of less than one means that the stock is trading at less than its book value or the stock is undervalued and, therefore, a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.
For example, a stock with a P/B ratio of 2 means that we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.
But there is a warning. A P/B ratio of less than one can also mean that the company is earning weak or even negative returns on its assets or that the assets are overstated. In such a case, the stock should be shunned because it may be destroying shareholder value. Conversely, the stock’s price may be significantly high — thereby pushing the P/B ratio to more than one — in the likely case that it has become a takeover target, a good enough reason to own the stock.
Moreover, the P/B ratio is not without limitations. It is useful for businesses like finance, investments, insurance and banking or manufacturing companies with many liquid/tangible assets on the books. However, it can be misleading for firms with significant R&D expenditure, high debt, service companies, or those with negative earnings.
In any case, the ratio is not particularly relevant as a standalone number. One should analyze other ratios like P/E, P/S and debt to equity before arriving at a reasonable investment decision.
Screening Parameters
Price to Book (Common Equity) less than X-Industry Median: A lower P/B compared with the industry average implies that there is enough room for the stock to gain.
Price to Sales less than X-Industry Median: The P/S ratio determines how much the market values every dollar of the company’s sales/revenues — a lower ratio than the industry makes the stock attractive.
Price to Earnings using F(1) estimate less than X-Industry Median: The P/E ratio (F1) values a company based on its current share price relative to its estimated earnings per share — a lower ratio than the industry is considered better.
PEG less than 1: PEG links the P/E ratio to the future growth rate of the company. The PEG ratio portrays a more complete picture than the P/E ratio. A value of less than 1 indicates that the stock is undervalued, and investors need to pay less for a stock that has bright earnings growth prospects.
Current Price greater than or equal to $5: They must all be trading at a minimum of $5 or higher.
Average 20-Day Volume greater than or equal to 100,000: substantial trading volume ensures that the stock is easily tradable.
Zacks Rank less than or equal to #2:Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform irrespective of the market environment.
Value Score equal to A or B: Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best opportunities in the value investing space.
5 Low Price-to-Book Stocks
Here are five of the 16 stocks that qualified for the screening:
Delaware-based Harmony Biosciences is a neuroscience company developing and commercializing therapies for sleep/wake disorders and rare neurological diseases.
Harmony Biosciences currently has a Value Score of A and a Zacks Rank #1. HRMY has a projected 3-5-year EPS growth rate of 32.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Atlanta, GA, Invesco Ltd. operates as an independent investment manager and offers a wide range of investment products and services.
IVZ has a Zacks Rank #2 and a Value Score of A. Invesco has a projected 3-5-year EPS growth rate of 22.02%.
Detroit, MI-based General Motors is one of the world’s largest automakers. General Motors, along with its strategic partners, produces, sells and services cars, trucks and parts under four core brands — Chevrolet, Buick, GMC and Cadillac. General Motors assembles passenger cars, crossover vehicles, light trucks, sport-utility vehicles, vans and other vehicles.
GM currently has a Zacks Rank #2 and a Value Score of A. The company has a projected 3-5-year EPS growth rate of 16.5%.
Headquartered in Houston, TX, Hewlett Packard Enterprise is a global enterprise technology company. It provides hardware, software and services that help businesses store, process and manage data across on-premise, cloud and edge environments. The company serves enterprises, governments, telecom operators and financial institutions in more than 150 countries.
Hewlett Packard currently has a Zacks Rank #1 and a Value Score of B. The company has a projected 3-5-year EPS growth rate of 32.0%
Houston, TX-based Quanex Building Products is an industry-leading manufacturer of components sold to original equipment manufacturers in the building products industry.
NX currently has a Value Score of A and a Zacks Rank #2. Quanex Building Products has a projected 3-5-year EPS growth rate of 14.0%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
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5 Undervalued Price-to-Book Stocks Worth Adding to Your Portfolio

PACCAR Inc. PCAR reported second-quarter 2026 earnings of $1.43 per share, beating the Zacks Consensus Estimate of $1.33 by 7.5%. The bottom line increased 4.4% from $1.37 in the year-ago quarter.
Consolidated revenues (including trucks and financial services) were $7.55 billion, up from $7.1 billion in the corresponding quarter of 2025.
Truck, Parts and Other revenues of $7 rose 0.5% year over year. Higher truck profitability and record parts revenues supported results, while global truck deliveries declined 1.5% to 38,700 units.
PACCAR Inc. Price, Consensus and EPS Surprise
PCAR’s Revenue Mix Favors Truck Sales
Truck revenues were $5.25 billion in the quarter, edging up from $5.24 billion a year earlier. Parts revenues increased 1.5% to a record $1.75 billion, reflecting continued strength in the aftermarket business.
Financial Services revenues were $549.7 million compared with $547.7 million in the prior-year quarter. Intersegment eliminations and other were $3 million.
Geographically, revenues from the United States and Canada declined 3.3% to $4.59 billion. European revenues advanced 6.9% to $1.79 billion, while revenues from other markets climbed 7.3% to $1.17 billion.
PACCAR Expands Truck Profit Despite Lower Deliveries
Truck pretax profit rose 16.7% year over year to $360.5 million from $308.8 million. The increase came even as worldwide deliveries slipped from 39,300 units in the prior-year period.
North American deliveries fell to 22,000 units from 23,000. Europe improved to 11,200 units from 10,600, while other markets declined to 5,500 units from 5,700.
The higher second-quarter build rates were attributable to strong orders and improving freight rates. PACCAR expects constrained freight capacity and an aging fleet to create opportunities for customers to replace trucks with newer, more fuel-efficient models.
PCAR Parts Delivers Record Quarterly Revenues
PACCAR Parts generated pretax income of $417 million compared with $416.5 million a year ago. The modest profit increase came alongside record quarterly revenues and continued investment in distribution and logistics capabilities.
The company expects improving North American freight conditions to support truck utilization and parts demand. Its parts network includes 21 distribution centers serving more than 2,000 DAF, Kenworth and Peterbilt locations and over 350 TRP stores.
First-half parts revenues increased to $3.46 billion from $3.41 billion. Pretax profit for the six-month period declined to $819.3 million from $843 million.
PACCAR Financial Services Holds Profit Steady
Financial Services pretax income was $124.1 million compared with $123.2 million in the year-ago quarter. Provision for losses on receivables increased to $39.4 million from $29.2 million, partly offsetting steady finance margins and an improving used-truck market.
The business ended the quarter with a portfolio of 222,000 trucks and trailers and $22.3 billion in total assets. PacLease’s fleet stood at 37,000 vehicles, and the segment issued $1.38 billion of medium-term notes during the first half.
First-half Financial Services pretax income declined to $239.6 million from $244.3 million. Revenues increased to $1.09 billion from $1.08 billion over the same period.
PCAR’s Costs and Cash Flow Remain in Focus
Within Truck, Parts and Other, cost of sales and revenues declined to $5.99 billion from $6 billion. Research and development expenses rose to $114.3 million from $112.9 million, while selling, general and administrative expense eased to $138.6 million from $139.2 million.
PACCAR generated $700.8 million in operating cash flow during the quarter. For the first half, operating cash flow was $1.67 billion, while capital investments and research and development expenses totaled $274.2 million and $223.4 million, respectively.
Cash and marketable securities were $8.67 billion as of June 30, 2026, compared with $9.25 billion at Dec. 31, 2025.
PACCAR Raises European Market Expectations
The company maintained its 2026 U.S. and Canada Class 8 industry retail sales forecast at 230,000-270,000 trucks. It expects European above 16-tonne registrations of 290,000-330,000 units, up from the previous estimate of 280,000-320,000.
The South American above 16-tonne market remains projected at 100,000-110,000 trucks. For 2026, capital expenditures are now expected between $700 million and $750 million, down from the previous estimate of $725-$775 million. Research and development expenses are now projected to be in the band of $450-$480 million compared with the previous estimate of $450-$500 million.
Spending priorities include clean diesel, hybrid and battery-electric powertrains, connected vehicle services and expanded manufacturing capabilities.
PCAR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto Space
General Motors Company GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.
Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years.
Genuine Parts GPC reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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PACCAR Inc. (PCAR) : Free Stock Analysis Report
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PACCAR Q2 Earnings Surpass Expectations on Truck Profit

For Immediate Release
Chicago, IL – July 27, 2026 – Today, Zacks Investment Ideas feature highlights General Motors GM, Abbott Laboratories ABT and Johnson & Johnson JNJ.
Q2 Earnings: Guidance Upgrades Push These 3 Stocks Higher
The 2026 Q2 earnings season will continue at a rapid pace in the coming weeks, with many notable companies on the reporting docket. The big banks helped kick the period off positively, though post-earnings reactions haven’t been great for all that have reported.
But General Motors, Abbott Laboratories and Johnson & Johnson have been nice standouts so far, all raising guidance and seeing strength post-earnings.
Guidance upgrades are generally one of the most bullish things to watch for in earnings season, as renewed outlooks can often lead to positive EPS revisions, the strongest driver of a stock’s near-term movement.
General Motors Raises Again
General Motors posted a double-beat relative to our consensus expectations, with EPS reflecting a positive surprise of 14%. Sales of $48.0 billion came in 3% above our consensus sales estimate.
The company raised its full-year 2026 EBIT adjusted guidance for the second time this year, with adjusted EPS guidance also getting raised. And for the cherry on top, it also lifted its automotive operating cash flow outlook, overall reflecting a rock-solid release.
EPS revisions for its current fiscal year got an additional boost from the lifted outlook, with the trend overall remaining positive for the entire last year. The profitability picture of automotive players is always the key driver behind sentiment, and the updated guidance across key profitability metrics remains a huge positive for GM’s share momentum overall.
Abbott Laboratories Bounces Back
Abbott Laboratories similarly posted a double-beat relative to our consensus expectations, with adjusted EPS of $1.31 reflecting a 2.3% beat while sales of $12.6 billion came in roughly 1% ahead of expectations.
The company lifted its adjusted EPS guidance to $5.45-$5.60, modestly higher than the previous $5.38-$5.58 per share range. It also reaffirmed its current-year comparable sales guidance, now expecting accelerating revenue and earnings growth in the second half of the year.
The stock has had a rough YTD performance overall, but the release has helped keep momentum going in a positive direction. Importantly, it reflects the first instance of the stock seeing positive gains over the last four quarters.
The EPS revisions picture for its current fiscal year has finally started to show positive momentum following the release, with the more recent revisions definitely holding more weight from a near-term perspective. Continued positivity on the revisions front will support further share momentum, with the current 17.3X forward 12-month earnings multiple trading at a significant discount to the 23.3X five-year median.
Johnson & Johnson Keeps Cruising
Johnson & Johnson beat on both the top and bottom line in its recent release, continuing a streak of earnings excellence. In fact, the company has posted a double-beat in nine consecutive quarters.
Strong operational performance led the company to increase both its current fiscal year sales and adjusted EPS guidance, with JNJ now on track to meet its 2026 target of more than $100 billion in annual revenue for the first time in its history.
EPS revisions for its current fiscal year have followed the upgrade, continuing the bullish trend established over the past year. The stock overall reflects a highly defensive investment given its consistent revenue-generating nature throughout many economic cycles.
Bottom Line
Guidance upgrades are always a bullish development to watch for in earnings releases, commonly leading to positive post-earnings share reactions. While it isn’t a guarantee that a stock will pop just because it raised its outlook, it still remains a favorable factor from a fundamental standpoint. Companies raising guidance, particularly on the earnings front, always deserve some level of attention from investors.
All three stocks above have recently upped their outlooks. While they may not be as flashy as high-flying tech stocks amid the AI craze, their improving business fundamentals can’t be overlooked.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Johnson & Johnson (JNJ) : Free Stock Analysis Report
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Zacks Investment Ideas feature highlights: General Motors, Abbott Laboratories and Johnson & Johnson

Key Points
Both GM and Ford have lucrative digital strategies, but their approaches are wildly different.
GM has cast a massive net by mandating OnStar and Super Cruise trial subscriptions.
These digital services come with a gross margin around 70% -- much higher than the traditional auto business.
The automotive industry has long been known for razor-thin margins, but that narrative is slowly changing as more subscription services and advanced software technology flood into vehicles. In fact, General Motors' (NYSE: GM) OnStar subscription services ended the second quarter with deferred revenue of $6.3 billion -- an almost 50% year-over-year increase. Those subscription sales come with far higher margins than its traditional automotive business, giving investors a new angle on an age-old industry and its potential.
Let's dig in and see how GM's digital strategy, as well as rival Ford Motor Company's (NYSE: F), could change the game for their investors.
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What's going on?
Rather than pushing sales of its OnStar and Super Cruise services to consumers at the point of purchase, General Motors is going about it in a different way. The automaker is bundling long-term prepaid OnStar and Super Cruise trials into new vehicle purchase prices. All 2025 and newer models include eight years of OnStar Basics, and select equipped models include three years of hands-free Super Cruise and associated connected services.
The idea behind this strategy is simple: General Motors is essentially casting the widest possible net it can over consumers, hoping that in three or eight years' time, those consumers will have become so accustomed to having those services that they will opt to purchase them outright in their next vehicle or transition to paid monthly or yearly digital plans to keep those features in the existing vehicle.
So far, the results are encouraging, with General Motors reporting that retention rates were roughly 30% to 40% of drivers continuing to pay for Super Cruise after the three-year prepaid term.
If you're wondering what deferred revenue (that $6.3 billion) is, it's this: By bundling these multiyear trials into the upfront purchase of the vehicles, in accounting terms, this is revenue that General Motors has already collected during the vehicle purchase. But because a portion of the revenue is derived from OnStar services delivered each month throughout the trial, the automaker can't claim it as earned revenue until that time comes.
Make no mistake, deferred revenue isn't some imaginary pile of cash General Motors won't get a chance to utilize. Rather, think of it as a massive financial backlog that gives transparency to highly profitable upcoming revenue.
Where GM goes from here
At the end of Q2, General Motors had $6.3 billion in deferred revenue and said it remains on pace to reach $7.5 billion in deferred revenue by the end of this year. Recognized revenue was $800 million during Q2, a 20% bump from the prior year, and it is on pace to recognize $3 billion through 2026. The rule of thumb is that these digital services like OnStar and Super Cruise check in with software-like gross profit margins, or roughly 70%. As an entire company, General Motors' gross profit margin fluctuated between 15% and 20% between 2020 and 2025.
General Motors is far from driving alone on this new path forward. Crosstown rival Ford Motor Company is doing something very similar with its BlueCruise -- also noted to deliver gross margins around 70%. Ford's BlueCruise subscription has an annual $495 price tag, or $49.99 monthly, and while it hasn't copied its rivals' upfront purchase strategy, it experienced an 88% rise in total hands-free miles driven globally last year and topped the half-billion, hands-free miles-driven threshold.
The major difference between the Detroit rivals is their strategies. As General Motors continues to cast its wide net, OnStar is expecting to add another 1 million subscribers in 2026 to reach nearly 13 million by year's end. Ford is experiencing rapid growth as demand increases, but without such a wide net as its rival, Ford brought its global total to 1.22 million vehicles with BlueCruise last year. At the end of 2025, it boasted an 80% increase in vehicles equipped from the prior year.
What it all means
General Motors and Ford Motor Company have already proven that demand exists for these services and have done enough business to show they can be lucrative, with high margins and solid retention rates. Investors would be wise to see this trend developing because these types of software and autonomous driving services are only going to get more common and desirable, especially as more software-advanced electric vehicles (EVs) hit the road, which long term can absolutely change the game and the razor-thin margin narrative the two Detroit icons have played for so long.
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Daniel Miller has positions in Ford Motor Company and General Motors. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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