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General Motors Stock Soars Ahead Of Hummer EV Reveal

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General Motors Stock Soars Ahead Of Hummer EV Reveal

General Motors Company (NYSE: GM) shares were rallying Tuesday ahead of the company’s highly anticipated debut of its fully electric Hummer truck.

The GMC Hummer EV will be GM’s first attempt to compete directly against Tesla Inc (NASDAQ: TSLA) and its EV Cybertruck. The new electric Hummer will also be the first GM model to feature the company’s next-generation Ultium EV platform and batteries.

GM's EV Transition Underway: The electric Hummer is part of GM’s plan to invest $20 billion in EV and autonomous vehicle technology through 2025. The company plans to launch at least 20 new EV models by 2023.

GM also announced Tuesday that it is investing $2 billion to build EVs in Spring Hill, Tennessee and another $150 million in Michigan plants in Lansing, Flint, Lake Orion, Romulus and Brownsville Township.

Related Link: BofA Names Its Top Clean Energy ETF Pick

The Hummer reveal comes after GM recently got clearance from California regulators for its Cruise AV subsidiary to begin testing unmanned vehicles on public roads in San Francisco before the end of the year.

GM Analyst Sees Valuation Upside: BofA Securities analyst John Murphy said Tuesday that GM’s advancements in EV and AV technology and its heavy investments in next-generation automobiles are a clear signal that the company is making progress in its transition to Auto 2.0.

“GM has been a hotly debated stock for years, but we believe the fundamental Core to Future transition underway at the company remains underappreciated by most investors,” the analyst said.

While popular EV stocks like Tesla and Nio Inc - ADR (NYSE: NIO) are up more than 700% in the last year, GM shares are up just 0.2% overall in that stretch.

Some traders have speculated that GM should spin-off its Cruise AV business to unlock shareholder value, but Murphy said that would be a short-sighted decision.

Instead, he said GM may choose to spin off elements of its legacy business to create value for investors.

“More rationally, we think GM may consider separating non-core older technology (e.g., Delphi in 1999) to isolate higher value future core technology/businesses,” the analyst said.

BofA has a Buy rating on GM with a $65 price target.

What’s Next? The big GMC Hummer EV reveal comes Tuesday night at 8 p.m. eastern during the World Series and “The Voice.”

Investors will be watching closely for vehicle specs, an availability timeline and public reaction to the unveiling.

GM Price Action: GM shares were trading 7.05% higher at $35.70 at last check Tuesday.

Photo courtesy of GM. 

Latest Ratings for GM

DateFirmActionFromTo
Nov 2020Morgan StanleyMaintainsOverweight
Nov 2020Credit SuisseMaintainsOutperform
Oct 2020BarclaysMaintainsOverweight

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