By Michael Elkins
Wedbush reiterated an Outperform rating and $42.00 price target on General Motors (NYSE:GM) after attending the company’s investor meeting today in New York. GM used the opportunity to “check up” on the company’s electrification strategy.
Analysts wrote in a note “Given the supply chain issues and global macro, GM easily could have been more cautious around targets, battery production, and overall demand looking ahead for the coming years. Instead, Barra & Co. came out swinging as GM feels very confident in its long-term EV targets and reiterated its goal through 2030 as the Ultium battery ecosystem has been humming despite global production/component issues.”
The company is on schedule to scale for 1 million vehicles in the U.S. by 2025 and 2M vehicles globally. Management is anticipating a ramp-up in cell production at its factory in Warren, Ohio with new sites planned for Spring Hill, TN and Lansing, MI over the next few years with a fourth site also soon to be announced. The company has announced several new electric vehicles set to hit the market over the next few years, taking a "no excuse" culture as the company under Barra's vision is driving the EV strategy and setting up for Phase 2 of the EV strategy.
Addressing the newest EV tax credits under the Inflation Reduction Act, General Motors is set to be a major beneficiary both from a demand and production perspective into 2023, raising its FCF guidance to $10 billion-$11B ahead of the Street's estimates.
“Heading into a key 2023-2025 stage for GM, the Street will be laser focused on EV updates around the core vision that Barra & Co. are driving. Tax credits will only accelerate these core metrics,” Wedbush added. “We walk away from the analyst day feeling incrementally confident that GM is on the right path towards accelerating its EV vision into the coming years with 2025 the major inflection point year.”
Shares of GM was down 0.57% to $38.25 at the close of trading on Thursday.