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.
[See: 7 of the Best Stocks to Buy for 2018.]
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.
[Read: Should You Buy Auto Stocks?]
“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 abundantly clear at this week’s event, and both Deutsche Bank and Bank of America are optimistic. Deutsche Bank has a “buy” rating and $51 price target for GM stock. Bank of America has a “buy” rating and $57 price target for GM.
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General Motors Company (GM) Investor Day to Highlight Autonomous Vehicles originally appeared on usnews.com
