BofA retains Buy rating on GM, maintains $85 price target By Investing.com

On Friday, BofA Securities maintained its Buy rating on General Motors (NYSE:) with a steady price target of $85.00. The endorsement comes ahead of General Motors’ Investor Day scheduled for October 8, 2024, in Spring Hill, Tennessee. This event is expected to shed light on the company’s future plans and current progress, particularly in the electric vehicle (EV) sector.

General Motors, which manufactures SUV models such as the Cadillac XT5, XT6, and the electric Lyriq, as well as housing an Ultium battery cell manufacturing plant in Spring Hill, is anticipated to discuss its product pipeline during the Investor Day. The company will also provide updates on its EV strategy, long-term EV targets, and review plans for its self-driving technology subsidiary, Cruise.

Moreover, General Motors is set to outline its approach to augmenting revenue through software and discuss its strategy for capital allocation. BofA Securities has expressed confidence in General Motors’ ability to navigate the transition from traditional automotive manufacturing to future mobility solutions, citing this as the rationale for the maintained Buy rating.

The upcoming Investor Day is a significant event for investors and industry watchers, providing insights into General Motors’ strategic direction in a rapidly evolving automotive industry. The company’s focus on electric vehicles and advanced technologies is pivotal as it competes in a market that is increasingly prioritizing sustainable and innovative transportation solutions.

In other recent news, General Motors (GM) has been at the center of several significant developments. The company recently announced that its electric vehicle (EV) customers will now be able to use Tesla (NASDAQ:) Superchargers across the United States, thanks to a GM-approved NACS DC adapter. This move increases GM EV owners’ access to over 231,800 public Level 2 and DC fast chargers across North America.

In legislative news, the U.S. House of Representatives passed a bill that could potentially impact GM and other automakers by restricting the inclusion of Chinese components in vehicles eligible for U.S. EV tax credits. This is part of an effort to reduce the U.S. electric vehicle battery supply chain’s reliance on China.

Financially, GM is undergoing some changes. Goldman Sachs is set to transfer its GM credit card business to Barclays, a process that is reportedly proceeding as expected, despite an anticipated $400 million pretax charge related to the exit. Additionally, General Motors Financial Company completed a public offering of senior notes totaling $1.75 billion, with the proceeds intended for general corporate purposes.

Lastly, Wolfe Research initiated coverage on GM shares with a Peerperform rating, citing uncertainties surrounding the company’s earnings outlook for 2025, potential losses related to EVs, and issues in China where GM has seen a drop in market share.

InvestingPro Insights

As General Motors (NYSE:GM) gears up for its Investor Day, the company’s financial health and market performance are key indicators of its potential to succeed in the evolving automotive landscape. According to InvestingPro data, General Motors boasts a robust market capitalization of $54.0 billion and an attractive P/E ratio of 5.5, which adjusts to an even more compelling 4.86 when considering the last twelve months as of Q2 2024. This aligns with the InvestingPro Tip that GM is trading at a low earnings multiple, suggesting that the stock may be undervalued relative to its earnings potential.

Furthermore, GM is noted for its aggressive share buyback strategy, which is a signal of management’s confidence in the company’s value. With a PEG ratio of just 0.22 over the last twelve months as of Q2 2024, the company’s earnings growth is expected to outpace its P/E ratio, indicating potential for future stock price appreciation. This is underscored by the fact that GM is trading near its 52-week high, with the price at 95.5% of this peak, reflecting strong investor confidence.

Investors can explore additional InvestingPro Tips, which delve deeper into the company’s financials and market performance, by visiting the InvestingPro platform. With 8 more tips available, users are equipped with a comprehensive analysis that can inform investment decisions ahead of GM’s Investor Day.

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