Investors are eager to hear updates on General Motors Co’s (NYSE: GM), electric vehicle (EV), strategy.
Mike Ward, a Freedom Capital Markets analyst, said that GM’s EV division will be a major focus at the event.
The company has committed itself to building at least 200 000 EVs by 2024, and aims to achieve a positive profit in this segment before the end of the year.
Ahead of this event, GM’s shares have risen by more than 30% since their lows in January, reflecting optimism regarding the company’s progress on the EV market.
What to expect at GM Investor Day
Investors will also be interested in updates on GM’s traditional automotive business.
GM must reassure its shareholders that even in a possible economic recession, its legacy operations will continue generating solid profits and cash flow.
Emmanuel Rosner is an analyst at Wolfe Research. He highlighted that investors’ expectations for GM legacy business are low. They predict declining operating profits and cash flow by 2025, along with significant EV losses.
GM can now deliver more positive news to the public than expected.
Cruise, GM’s autonomous vehicle division, is another area of interest for investors.
GM is committed to its self-driving cab unit, despite regulatory challenges in California.
Uber will integrate Cruise vehicles in its fleet, as per an agreement signed with GM last August. This shows that the autonomous venture is still gaining momentum.
Is GM stock a good buy before Investor Day?
GM’s traditional automobile business continues to generate substantial profit despite challenges in the EV sector.
By 2025, the company is expected produce free cash flow of around $8.4 Billion.
A confirmation from GM management that dividends and stock buybacks will continue, even if the economy is slowing, could give GM’s shares a boost.
Investors are keen to hear from the company any assurances they can give in this regard.
Goldman Sachs has recently reiterated their “buy” rating for GM shares. Their price target is $61, which represents a potential 35% increase.
The investment firm cited GM’s long-term profitability potential, cost discipline and capital allocation strategy, as key drivers of its bullish outlook.
GM will also release its third quarter earnings on October 22. Analysts expect the company to report earnings at $2.54 per shares, compared with $2.28 per share a yea ago.
The investor day is a great opportunity for GM as it navigates traditional and emerging markets.
This post General Motors Investor day: What to expect from GM Tuesday may be updated as new information becomes available
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