Investors are anticipating some major updates from General Motors Company (NYSE: GM) when the company holds its investor day event on Wednesday and Thursday. Bank of America analyst John Murphy says the event could certainly move GM stock.
“In particular, we expect GM will showcase its Cruise Anywhere AV-EV ride-hailing operation, which could demonstrate its relative leadership position in the autonomous/electric evolution,” Murphy says.
After years of lagging the market, GM stock finally came alive in the second half of 2017 on high hopes for the company’s electric and autonomous vehicle initiatives.
According to Murphy, GM will also likely provide investors with some form of financial guidance for its new technology and could outline the company’s strategy for achieving full market value for its businesses.
Even after a 35 percent rally in the past six months, GM stock still trades at a forward price-earnings multiple of 7.6, making it one of the lowest-valued stocks in the entire Standard & Poor’s 500 index. In October, GM president Dan Ammann shot down speculation that GM could choose to unlock value by spinning-off its Cruise Automation unit into a separate company.
Investors piled into Tesla (TSLA) in the first half of 2017 on hopes that the company’s Model 3 and Autopilot technology would be the standard-bearers in the auto industry’s shift toward autonomous electric vehicles. However, Murphy says companies like GM that have well-established vertically integrated business models are in a much better position to capitalize on the shift.
“Along those lines, we believe GM’s ability to integrate an autonomous electric vehicle into a ride-hailing fleet and/or shared fleet, with the overlay of OnStar, puts the company in a unique competitive first mover position,” Murphy says.
In September, Deutsche Bank analyst Rod Lache said General Motors may be much farther ahead of the driverless vehicle competition than investors realize.
“GM’s AVs will be ready for commercial deployment, without human drivers, much sooner than widely expected (within quarters, not years), and potentially years ahead of competitors,” Lache said.
GM’s lead (or lack thereof) may become…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
