General Motors (GM) shares have extended gains in recent weeks, but options traders believe they will pare back some of them after the earnings event on Oct. 20. Consensus is for the automaker to record $3.52 in earnings per share (EPS) for its third fiscal quarter, which would represent a healthy 25.71% increase on a year-over-year basis.
Heading into the quarterly print, General Motors stock is trading about 19% above its year-to-date low.
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www.barchart.comOptions Data Signals a Post-Earnings Dip in GM Shares
Despite expectations of meaningful growth, the options market believes GM’s earnings will trigger an initial sell-the-news reaction.
According to Barchart, the put-to-call ratio on contracts expiring Oct. 23 sits at 1.55x at the time of writing, indicating a strong bearish skew. The lower price on those contracts is set at $79.31, signaling potential for a decline of about 5.38% within days after the quarterly release.
Crucially, the technical setup also warrants some caution heading into General Motors’ earnings. The automaker is currently testing its 100-day moving average (MA), with a decisive break below the $83 level expected to accelerate bearish momentum in the near term.
Should You Still Load Up on General Motors Stock?
Near-term options market sentiment does not, however, erase General Motors’ longer-term appeal, especially since it continues to repurchase billions of dollars’ worth of its shares. Buyback initiatives are broadly treated as bullish as they reduce a company’s overall share count and boost its future earnings per share (EPS).
Meanwhile, institutional confidence adds another encouraging signal; Neumann Capital loaded up on more than 49,000 GM shares in Q3, worth a total of about $3.8 million.
Investors should also note that General Motors currently pays a dividend yield of 0.86%, which makes it even more attractive as a long-term holding in late 2026.
What’s the Consensus Rating on General Motors?
Wall Street analysts also disagree with the bearish options market sentiment on GM stock.
According to Barchart, the consensus rating on General Motors remains at “Strong Buy,” with the mean price objective of nearly $102 indicating potential upside of more than 20% from current levels.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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