DETROIT (Reuters) – General Motors Co is expected to report a healthy fourth-quarter profit on Wednesday thanks to strong demand for gas-fired pickup trucks and SUVs, but the company’s future electric vehicles are now driving the stock, shareholders and analysts.
Since November, when Chief Executive Mary Barra outlined plans to increase spending on electric vehicles, GM shares have risen 60%. The rise has long stalled near the $ 33 stock price in 2010, and shareholders have long been 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, director of research at GM investor Levin Easterly Partners, called the “nice, stable drumbeat” of EV’s Detroit company and cutting edge technology news. He thinks GM could be a $ 100 share in a few years.
GM has helped change the story since November by accelerating spending on and developing electric vehicles, announcing plans for an electric van and a dedicated unit to serve commercial customers, and setting a goal of increasing light vehicle sales. gasoline by 2035.
Investors also appreciate a greater focus due to the broader electric vehicle market powered by Tesla Inc and the numerous companies going public through mergers with specialty acquisition companies, or SPACs.
“I’ve never noticed that greenfield competitors had an insurmountable advantage,” said Josh Sandbulte, chief investment officer at Greenhaven Associates, one of GM’s largest shareholders.
Investors are starting to hold companies to a higher standard with regard to their climate plans. Last month, the head of BlackRock, the world’s largest asset manager, warned companies in which it invests that they must demonstrate a plan to survive in a world aiming for zero net emissions by the middle of the century.
Another boost to GM’s stock was Microsoft Corp’s investment last month in Cruise, the self-driving company in which GM has a majority stake. The cruise business went from a $ 19 billion valuation to $ 30 billion with that deal, exceeding expectations.
Investors are now seeing GM’s sum-of-the-parts business yield a much greater number, said Barclays analyst Brian Johnson.
“If you wanted to dream big on GM, you would take the EV business at a Tesla multiple, the (EV) bus business at a SPAC multiple, and the Cruise business at the Microsoft market,” Johnson said. who sees a positive thing for a stock valuation of $ 100.
Reporting by Ben Klayman in Detroit; Editing by Nick Zieminski