5. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 72
Forward PE Ratio: 4.58
Average Price Target Upside: 19.31%
General Motors Company (NYSE:GM) is a major global automaker known for designing, building, and selling trucks, cars, crossovers, and automotive parts. The company’s well-known brands include Buick, Cadillac, Chevrolet, GMC, Baojun, and Wuling. It distributes its products through a wide network of retail dealers and distributors, serving both individual buyers and fleet customers. It is one of the most undervalued auto stocks to buy.
The company is moving toward electrification with its Ultium Platform. It is GM’s electric vehicle battery and motor system designed for flexibility across various brands and models. It was launched in 2020 and features a modular design with pouch-style battery cells and shared power electronics.
Ultium Drive includes five drive units and three types of electric motors that support front, rear, and all-wheel drive configurations. The system uses nickel-cobalt-manganese-aluminum battery chemistry. Ultium batteries are scalable and support different vehicle sizes and power needs.
In the third quarter, General Motors (NYSE:GM) and its dealers saw a 3% increase in U.S. retail sales, delivering a total of 659,601 vehicles, though overall deliveries were down 2%. The company achieved a record quarter for EV sales, with 32,095 deliveries, marking a 60% year-over-year increase and a 46% rise from the previous quarter.
In the fourth quarter, the company is planning to launch five ICEs including 2025 models of GMC Terrain, GMC Yukon, Chevy Suburban, Cadillac Escalade, and Chevy Tahoe. It is also launching two EVs, which include the 2025 Cadillac Escalade IQ and the 2025 Cadillac Escalade OPTIQ.
On October 1, The Fly reported that Goldman Sachs increased its price target for General Motors (NYSE:GM) from $53 to $61 while maintaining a Buy rating. The change is part of a broader review of the U.S. auto and industrial sectors.
The firm has also lowered its forecast for the U.S. Seasonally Adjusted Annual Rate, as the firm noted that it has been weaker this year, at an average of around 15.5 million vehicles. Additionally, surveys show that fewer lower-income consumers plan to buy vehicles.
Despite these issues, Goldman Sachs is still positive about General Motors’ (NYSE:GM) long-term profit potential, pointing out that it has outperformed other auto stocks this year due to good pricing strategies and capital management.
Diamond Hill Capital stated the following regarding General Motors Company (NYSE:GM) in its Q2 2024 investor letter:
“Other top Q2 contributors included Extra Space Storage and General Motors Company (NYSE:GM). Shares of automobile manufacturer General Motors (GM) rose as its internal combustion engine business has also received a boost from the recent slowdown in electric vehicle adoption among consumers. GM also announced additional share repurchases in Q2, reinforcing its commitment to returning cash to shareholders.”
