GM

GM's headline numbers look ugly — net income fell 55% to $2.70B, operating income collapsed 77% to $2.91B, and the 24.2x P/E screens expensive — but the MD&A explains almost all of it: the company recorded $7.9B of GMNA charges in 2025 to reassess EV capacity after consumer demand slowed (driven by the termination of EV tax incentives and the OBBBA), plus a $3.1B EBIT-adjusted tariff hit. These are largely non-recurring; management states the EV reassessment is 'complete' and that 2026 charges will be 'significantly less.' Strip them out and GM's underlying earnings power is multiples of the $2.70B reported, which makes the GAAP P/E misleading and the 0.4x P/S the more honest valuation signal.

The cash story confirms the franchise is healthy beneath the charges. Operating cash flow rose 33.5% to $26.9B against just $9.3B of capex (down 14.1%), leaving ~$17.6B of free cash flow on a $71.7B market cap — a high-teens FCF yield. Management is returning it aggressively: $6.01B of buybacks shrank the share count 9.1% in one year, and cash grew to $20.9B. The MD&A's strategy — leaning into high-margin ICE trucks and SUVs while right-sizing EV capacity to real demand — is the pragmatic response to a market that has turned against EVs, and the OBBBA setting CAFE non-compliance penalties to zero plus proposed GHG rollbacks lower future compliance costs.