GM Wants All the Tesla Smoke

General Motors CEO Mary Barra laid out the company’s electric vehicle strategy on Wednesday, showcasing twelve products as part of a broader attempt to convey to investors how serious it is about embracing its electric future.

So Government Motors stock is mirroring an electric vehicle stock, with shares going apeshit after a Thursday upgrade. Argus Research analyst William Selesky believes the company’s pivot into EVs will work. He upgraded General Motors [GM] stock to Buy from Hold and set a target price at $56 a share. Selesky didn’t have a target price on GM stock before the upgrade.

Business is booming for GM these days, he wrote, as its balance sheet is strong and profit margins in its U.S. business are flourishing. Even so, Selesky thinks investors are minimizing the company’s Chinese joint venture, as well as its finance unit and Ultium battery business. He now predicts GM reporting about $5.89 a share in 2021, up from his prior forecast of $5.39. NIO Rolls Out a New EV

In addition to showing off some of its upcoming vehicles, GM revealed an all-new modular electric vehicle platform with an improved battery pack called Ultium. Much like, Volkswagen’s MEB platform, the GM platform is intended to be flexible and multifaceted, with the goal of eventually undergirding a variety of vehicle types and shapes.

The auto company’s shares have been red hot as of late, up more than 60% since November. (Tesla [$TSLA] stock is up more than 80% in that time; normal?). Analysts and investors are starting to believe in the company’s EV strategy. GM CEO Mary Barra has spent a lot of time this past year articulating the strategy, which involves billions of investment in coming years resulting in dozens of new battery-powered electric vehicles.

The recent stock runup has flipped the script on the company’s performance under Barra’s term as chief. GM stock has now returned about 16% per year under her tenure, a wee bit better than the market over the same span. About 60% of the total return has come in the past three months. Here’s Why Plug Power Has Gone Parabolic Since June

Thursday’s rally leaves GM stock on pace for another record-setting close. Shares recently cruised past their 2017 record on Tuesday, after Barra spoke at the 2021 Consumer Electronic Show. To be sure, that record only includes the past decade, the period of time GM has been public since it rearranged its debts in bankruptcy in late 2009.

The new batteries are unique because of the “large-format, pouch-style cells,” compared to cylindrical cells, which GM says enables them to be stacked vertically or horizontally inside the battery pack. These batteries will offer power ranging from 50 to 200 kWh, which could allow for a driving range up to “400 miles or more.” Motors designed in-house will support front-wheel drive, rear-wheel drive, all-wheel drive, and performance all-wheel drive applications.

GM stock is up almost 20% so far this week. Shares popped more than 6% after Barra’s CES talk where she illustrated, again, the company’s electrification as well as autonomous driving efforts. After that, analyst upgrades took over as the main reason for further share price gains, as Selesky’s upgrade is the second in just days. On Wednesday, Normua analyst Anindya Das bumped shares up to Buy and set his target price at $60 a share.

Overall, Wall Street is yugely bullish on GM stock. With Thursday’s upgrade, 19 out of 20 analysts rate shares Buy. That’s 95%, is that good? The average Buy-rating ratio for stocks in the Dow Jones is about 57%. The average analyst price target is about $55 a share, roughly 7% above recent levels, despite the monster three-month rally in the stock price. Li Auto is Making a Name for Itself in the EV Space


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