Bernstein calls out a strong entry point on General Motors Company (GM) with an upgrade to a Buy rating from Neutral.
The firm expects the Detroit automaker to generate strong free cash flow through 2024 and for sales of gas-powered vehicles to help to fund the electric vehicle transition. Eventually, GM is seen achieve rising gross margin off improved production efficiency.
Analyst Adrian Yanoshik and team expect GM to meet its 400,000 EV sales target by 2023 and to exceed its target for one million EV sold before 2025 goal, which would put it on course to be an EV leader in North America.
“Near term, GM’s widening backlog for its Silverado EV pick-up will coincide with two volume SUV launches (ie Equinox, with a USD30,000 price). Moreover, we think that the GMC Hummer EV and Cadillac Lyriq can help to attest to the quality of its EV platform and demonstrate its deeper vertical integration in BEV production.”