General Motors (GM) delivered a solid fourth-quarter performance on Tuesday, with adjusted earnings per share hitting $2.51—a 30.4% jump from last year and comfortably ahead of the $2.20 consensus. Revenue came in at $45.287 billion, slightly missing expectations of $45.804 billion, but the earnings beat was enough to get investors' attention.

Here's where things get interesting: GM's fiscal 2026 guidance calls for adjusted earnings between $9.75 and $10.50 per share. Wall Street was looking for $11.73. That's a pretty big gap, and it suggests the automaker might be playing it safe.

Why One Analyst Thinks GM Is Sandbagging

RBC Capital analyst Tom Narayan clearly thinks there's more upside than GM is letting on. He bumped his price target from $92 to $107 while maintaining an Outperform rating on the stock.

Narayan's thesis is that commodity and onshoring pressures will be offset by several positive factors: regulatory benefits, warranty improvements, shrinking EV losses, and lower tariffs thanks to USMCA. He estimates these tailwinds could boost adjusted EBIT by an extra $500 million in fiscal 2026, bringing total tariff-related gains to $600 million year over year.

The analyst believes GM's guidance doesn't fully account for a USMCA resolution, which could push actual results above consensus. He also likes how the company is positioned to handle slower EV demand while keeping production flexible enough to ramp up if things pick back up.

Narayan expects strong pricing discipline and roughly $6 billion in shareholder returns—about 8% of GM's market cap. He raised his fiscal 2026 EPS estimate to $13.07 from $12.20, while trimming revenue expectations slightly to $169 billion from $171 billion.

GM Price Action: General Motors shares were down 1.63% at $84.97 at the time of publication on Wednesday, still hovering near the stock's 52-week high of $87.31.