General Motors is fast becoming one of the most exciting players in the electric-vehicle space—and Wall Street is starting to notice.
baron’s There is also an eye on the 114 year old company: Associate Editor Andrew Berry recently named GM (ticker: GM) one of its top stocks for 2022.
Several factors play into the bullish case for GM — a key part being that the automaker plans to double its revenue to nearly $300 billion by 2030. About a third of those sales, GM predicts, will come from EVs.
After unveiling the 2024 Chevrolet Silverado EV pickup, GM also drew praise at this month’s Consumer Electronics Show in Las Vegas. The truck, which is set for sale next year, Boasts a range of over 400 miles – leaving behind a range of 300 miles for the F-150 Lightning, an electric truck from Ford Motor (F) slated to hit the market in 2022.
While GM is making great strides, its stock price hasn’t yet reflected those moves. According to FactSet, GM trades at about nine times expected 2022 earnings, while EV maker Tesla (ticker: TSLA) trades at 117 times earnings. GM, which counts brands like Chevrolet and Buick in its portfolio, has a market capitalization of less than a tenth that of Tesla.
And while it may not be fair for GM to trade in a Tesla-sized price-to-earnings ratio, it seems reasonable to expect that GM will narrow the gap between the two companies as it becomes an EV player. . Analysts polled by FactSet expect GM shares to trade closer to $76, up 22% from recent trading levels.
GM is also taking other measures to improve its performance, such as working with Posco Chemical, a South Korean company that makes materials for EV batteries to build a North American factory. For GM, this means an opportunity to reduce costs and take tighter control of its supply chain.
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