Profits aside, GM’s EV plans are leading to increased stocks

DETROIT (Reuters) – General Motors Co is expected to report a healthy profit in the fourth quarter on Wednesday due to strong demand for pickups and SUVs that burn gas, but the company’s future electric vehicles are now driving the stock, shareholders said and analysts.

Since November, when CEO Mary Barra outlined plans to increase spending on electric vehicles, GM shares have risen by 60%. Long stuck near the initial 2010 public offering price of $ 33, long-standing shareholder growth celebrating.

“I don’t think there has ever been a more exciting time to be a GM shareholder,” said Michael Razewski, a partner at Douglas C. Lane & Associates, which owns more than 2.84 million shares.

Chris Susanin, research director at GM investor Levin Easterly Partners, credited the Detroit-based company with the “nice steady drum beat” of EV news and advanced technology. He believes GM could be a $ 100 share in a few years.

GM helped change the November narrative by increasing spending on and accelerating the development of electric vehicles, announcing plans for an electric van and a dedicated unit to serve commercial customers and setting a target to stop selling light gasoline vehicles by 2035

Investors also place greater emphasis on the broader electric vehicle market, led by Tesla Inc. and the many companies that go public through mergers with special purpose procurement companies or SPACs.

“It never seemed like a business to me that green competitors had an insurmountable advantage,” said Josh Sandbulte, chief investment officer of Greenhaven Associates, one of GM’s largest shareholders.

Investors are beginning to keep companies at a higher standard in terms of their climate plans. Last month, the head of BlackRock, the world’s largest asset manager, warned companies he was investing in that they would have to come up with a game plan for survival in a zero-emission net by the middle of the century.

Also, the increase in GM’s stock was Microsoft Corp’s investment last month in Cruise, the self-driving business in which GM has a controlling stake. The cruise business went from a valuation of $ 19 billion to $ 30 billion with this transaction, expectations of overfeeding.

Investors now see that the total amount of GM parts amounts to a much higher number, said Barclays analyst Brian Johnson.

“If you want to dream big at GM, you would take the EV business to a Tesla multiple, the truck business (EV) to a SPAC multiple and the Cruise business to the Microsoft brand,” said Johnson, who sees a positive situation for an evaluation of the stock. of $ 100.