Business Insights on One Global Automobile Stock – GM

General Motors Company

General Motors Company Details

General Motors Company (NYSE: GM) is engaged in manufacturing automotive which also includes electric vehicles. Some of its brands including from JVs and subsidiaries include Chevrolet, Buick, GMC, Cadillac, Baojun and Wuling, to name a few.

Result Performance for FY21 and Q4FY21

• The Group reported sales of $127,004 million in FY21, compared to $122,485 million in FY20.
• Net income also improved to $10,019 million in FY21, from a level of $6,427 million in the prior year.
• In Q4FY21 the company reported a net income of $1.7 billion and the net margin stood at 5.2%.
• Diluted EPS during Q4FY21 stood at $1.16.

Source: Company Reports, Analysis by Kalkine Group

Outlook

The Group expects FY22 EPS- diluted and EPS-diluted-adjusted to be between $6.25 and $7.25. It also anticipates the net income to be between $9.4 billion and $10.8 billion during the same period.

Key Risks

The present market conditions have been very volatile in nature owing to geopolitical tension and an uptick in raw material prices. These might have an impact on the demand for the company's products.

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

Technical Overview:

Daily Price Chart

Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period)

Stock Information                                      

The company has delivered a 6-month and one-year return of ~-16.42% and ~-22.87%, respectively. The stock is trading lower than the average of the 52-week high price of $67.21 and the 52-week low price of $39.75.

The stock has been valued using an EV/Sales multiple-based illustrative relative valuation, and the target price so arrived reflects a rise of low double-digit (in % terms). A slight premium has been applied to EV/Sales Multiple (NTM) (Peer Average), considering the impressive financial performance and optimistic guidance.

Considering the aforementioned factors along with growth in top-line and bottom-line, a “Buy” recommendation has been assigned on the stock at the current market price of $43.66 per share, as on 09:44 am New York Time, USA (GMT-4) as of 28th March 2022.

General Motors Company  is a part of Kalkine’s Global Fully Charged Portfolio

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.