Shares hit a record high, rising 24% in the new year
Analysts say investors may have underestimated GM’s potential
General Motors Co. shares are on their longest winning streak since November, rising a fourth day, as the Chevrolet owner’s latest push into electric vehicles encouraged investors and Wall Street analysts alike.
The auto giant’s stock price touched an all-time intraday high at $51.57 on Thursday after closing at record highs on each of the past two trading days -- notching a 24% gain in the new year. In comparison, the shares rose only 14% in all of 2020, as car sales suffered globally after drivers stayed locked-down in their homes and drastically reduced travel and commutes to work.
As vehicle sales languished, GM missed out on the rally in electric-vehicle stocks that catapulted some upstarts into multibillion dollar companies. Chinese EV-maker Nio Inc., for example, often called the biggest rival of industry frontrunner Tesla Inc. in that country, now commands a market capitalization greater than GM.
Analysts now say that investors may have underestimated GM’s potential, including its joint ventures, battery technology and possible cost savings from a restructuring in North America.
“We believe that investors have undervalued the company’s strength in traditional internal combustion vehicles, as well as its Chinese joint venture, Ultium battery, and financial services businesses,” Argus Research analyst William Selesky said while upgrading GM to buy from hold on Thursday.
Read any non fan site article about GM and you will see they have a long ways to go with customers. There are too many people that wouldn't consider a GM vehicle, no matter how good it is currently. Going EVs will help with that imo.
I just said this in a different thread... GM seems to be able to market themselves to Wall Street better than they can to consumers which is my biggest concern of their dive into BEV. As you noted there is so much "anti-GM" (and Ford) out there from decades of mismanagement that they really need to take a moonshot to change that perception. I hope BEV is enough of a moonshot, either way it concerns me that a lot of the success relies on GM's marketing arm. MB has made a lot of positive and transformative changes to GM, but effective consumer marketing seems to still be an elusive goal.
Either way, nice artice toward GM! Though there is no way their stock will ever rival Tesla's. Though I don't think it should - no car company should have a market cap where Tesla's is unless they invent cold fusion.
Although GM has been making great strides as of late showing themselves capable of putting themselves in the fight for relevance in the automotive industry, it is an uphill battle they have to rid themselves of various issues they've created for themselves over the decades (engineering quality, design, branding, and marketing). In addition, GM has a history of making positive moves only to take a few steps back due to outside forces they either do or don't have control over.
So, l agree this is positive news, but, my guess is that it will take some more people some more time for GM to prove it can stick to its plan despite outside forces working against them. It will only make their value go even higher over time. In the end, GM needs to exhibit corporate discipline regardless of internal corporate politics.
Tesla stock price is agreeably high. There is two main parts to its so-called over-valuation. Firstly, Tesla has somewhat the same brand loyalty that Apple used to have where there is nothing that could go wrong with them because these Tesla-maniacs will buy Tesla one way or the other. The other piece of their valuation is that they actually span multiple industries and markets and liken Tesla valuation to equal GM's + ExxonMobil + (pick your electric utility) as an example. Tesla would be smart to leverage this over valuation to actually excel in each expanded market by using these Tesla maniacs to help them expand into these other markets.
GM and Tesla are very different companies and are executing very different corporate strategies--even though they intersection in a few market areas.
GM is in a very precarious situation, "Governmental/Environmental Changes" of which is driver in this current "EV Crazy" on one hand is helping GM and the wad they have blown on EV's.
On the other hand, it also has the potential for "The Empowered Mob" to throw buckets of paint on any vehicle that burns gas, specifically the larger ones that can barely go 20 miles on a gallon of gas.
(that would be most of those things GM makes its millions on............)
I guess it is better to have a hedge, than not, but will be interesting to see this all play out.
It comes down to the product, if GM delivers there is a whole new generation who were kids when GM went BK, and have no knowledge or even care about the past as long as the present is good. Look no further than the present Trail Blazer sales.
The EV product is competent enough that Honda using the platform, so that is a good start.
This EV platform is totally Rad, cheap enough to be profitable, flexible enough to underpin different platforms accross multiple brands and price points..60% more energy density than Bolt, and that is GM’s own battery chemistry, not LG.
They claim that they can go completely free of expensive metals in a couple of years and are already in the industrial scaling phase of next gen chemistry,
I asked my neighbor about Watson, he said they've abandoned their attempts to get it to work in the health industry, but Watson is still alive. You've probably interacted with Watson - he said some companies use it as their online sales assistant. So when you think you are IM'ing a human, good chance that you aren't - it's Watson or he said Google has their own version as does Amazon.
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