General Motors Company

GM Details

General Motors Company (NASDAQ: GM) designs, build, and sells trucks crossovers, cars, and automobile part and provides software-enabled services and subscriptions globally.

Financial Results

• GM has realsed Q1 FY 2023 revenue of $40.0 Bn, net income attributable to stockholders of $2.4 Bn as well as EBIT-adjusted of $3.8 Bn.
• In the U.S. market, GM led the industry in retail as well as fleet deliveries, commercial deliveries and truck sales. Also, it earned the largest YoY increase in market share of any automaker with robust production and inventory discipline, and consistent pricing.
• In addition, the company delivered more than 20,000 EVs, due to the third consecutive quarter of record Chevrolet Bolt EV as well as Bolt EUV deliveries and rising Cadillac LYRIQ sales.

Outlook

GM has raised its full-year 2023 earnings guidance to the range of between $11 Bn - $13 Bn. GM is planning to produce 400,000 EVs over the course of 2022, 2023 as well as H1 FY 2024, including 50,000 EVs in North America in the H1 of this year, as well as double that in the H2.

Key Risks

The company is exposed to a slowdown in economic activity along with the increase in commodity prices. Other key risks for the group are increasing competition, currency volatility, etc.

Valuation Methodology: EV/Sales-Based Relative Valuation (Illustrative)

Stock Recommendation

The stock is trading above the average price of the 52-week low-high range for the stock at USD 30.33- USD 43.63, respectively.

The stock has been valued using Price/EPS multiple-based illustrative relative valuation, and the target price so arrived reflects a fall of low double-digit (in % terms). A slight discount has been applied to EV/Sales Multiple (NTM) (Peer Average) considering the current trading levels and risks associated.

Resultantly, it is prudent to liquidate the stock at the current levels.

Hence, a ‘Sell’ rating has been provided on the stock at the closing price of USD 38.03 per share as on 15^th June 2023.

Technical Overview:

Daily Price Chart

General Motors Company (GM) is a part of Kalkine’s Global Big Money Product

Markets are trading in a highly volatile zone currently due to certain macroeconomic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

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