General Motors (GM), the formidable giant of U.S. automakers, has been strutting its stuff in the stock market of late. With shares edging close to $50, GM hit a peak of $49.78 this past Friday, a stone’s throw away from its 52-week zenith of $50.50.
With a market cap surpassing $55 billion and holding a robust 16.2% share of the U.S. auto market in 2023, GM has not just relied on the glory of its gas-guzzling pickups and SUVs. The auto titan is channeling hefty investments into green vehicles, gearing up for the thrilling era of sustainable and autonomous mobility.
The Ascending Trajectory of GM Stock
GM has outshone its peers, with a staggering 38% surge year-to-date, overshadowing not just its sector and industry, but also the illustrious S&P 500 index, not to mention its close contender, Ford (F).
Paying a Steal for GM Stock
Brimming with optimism, GM has consistently outshined profit expectations in the recent quarters, with an average earnings surprise of 18.8%. As estimates soar for 2024 and 2025, GM’s forward price-to-earnings ratio stands at a tantalizing 4.98, a tempting bargain compared to the industry’s standard of 33.93. Even with the share price lurking near yearly highs, GM persists as a golden opportunity, marked as an ‘A’ by Value Score aficionados.
Bullish on GM: Five Compelling Reasons
Cost-Cutting Mastery: GM is on track to slash costs by $2 billion by 2024. The firm successfully curtailed $1.4 billion in fixed costs last year, making way for another billion this year.
GMNA Dominance: GM’s stronghold in the U.S. soared to 16.6% in Q2 of 2024, elevating its market share by 1.2 percentage points sequentially. GM is now envisioning adjusted EBIT to soar to $13-$15 billion.
Championing Electrification: Despite initial tremors from Tesla and other EV pioneers, GM marches forward with its EV metamorphosis, aiming for profitability in its EV segment by Q4 of 2024. Key projects like Ultium Drive system and various battery plants signal its commitment to the electric roadmap.
Cruise in Power Drive: GM’s Cruise autonomous driving division is poised for a redemption arc, with plans to relaunch fully autonomous rides and rake in revenues as early as 2025. A strategic tie-up with Uber further accentuates Cruise’s potential.
Financial Fortitude & Buyback Blitz: With $35.8 billion in automotive liquidity as of June, backed by a robust buyback program, GM exudes confidence in its financial mettle.
Strap in for the GM Stock Rollercoaster
Industry pundits predict a bright future for GM stock, with a targeted price of $55.74 per share indicating a potential 12% upsurge. Riding high on its EV pursuit and unwavering ICE profitability, GM stock presents a mouth-watering opportunity for savvy investors.
Despite brushing shoulders with its yearly acme, GM’s allure remains unscathed, beckoning investors with its robust fundamentals, compelling valuation, and optimistic estimates. With a Zacks Rank #2 (Buy) and a stellar VGM Score of A, GM signifies not just a stock but a journey brimming with promise.