- NYSE: GM is on course for further gains, extending its steady rise.
- General Motors Company's low valuation stands out after NIO's disappointing earnings.
- The veteran automaker's venture into EVs could provide it additional upside.
Will this tortoise surpass the hare? After being in business for more than 112 years, General Motors Company (NYSE: GM) is catching up with the latest technologies. Will its value and eventual dividend meet that of shiny rivals?
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The fresh interest in the company run by Mary Barra comes after Nio Inc (NYSE: NIO) reported disappointing earnings results. The Shanghai-based electric vehicle maker – once dubbed "China's Tesla" – failed to turn a profit, serving as a reminder that financials still matter.
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Moreover, Elon Musk's Tesla, that rake in more money than it spends, has a forward P/E close to 200 while GM's is hardly in double digits. Legendary investor Warren Buffet has more funds in BYD than in GM, but even the Oracle from Omaha may be missing something.
Investors are naturally attracted to lean and mean companies that focus solely on technologies of the future and dismiss the old giants. However, General Motors is venturing into electric vehicles, most recently via Brightdrop, a subsidiary. The spin-off focuses on commercial delivery and logistics solutions such as EV600 that will go to FedEx later in the year. Moreover, it is backed up with a cloud-based software platform ready for updating vehicles.
GM Stock Forecast
Are investors overlooking GM's jump into new technologies? Trading in recent days – even before NIO's earnings – has shown that General Motors is gaining traction. Shares are set to rise by 1.55% on Wednesday, and that would be the fourth consecutive day of gains.
As the color on the chart above signals, NYSE: GM is still down in February. Nevertheless, it is within striking distance of the 52-week high of $57.05, which serves as the next target. While that may dampen the dividend yield, the Michigan-based veteran may still find buyers even after exceeding that level.
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