Aside from the benefits, GM’s EV plans are driving a rising stock now

DETROIT (Reuters) – General Motors Co. is expected to report a healthy fourth-quarter profit on Wednesday thanks to strong demand for gas-burning vans and SUVs, but now the company’s electric vehicles control shares, shareholders said and analysts.

Since November, when chief executive Mary Barra laid out plans to increase spending on electric vehicles, GM shares have risen 60%. Long stopped near the starting price of the 2010 public offering of $ 33, the increase has long held shareholders.

“I don’t think it’s ever been a more exciting time to be a GM shareholder,” said Michael Razewski, a partner at Douglas C. Lane & Associates, which owns more than 2.84 million shares.

Chris Susanin, research director for GM investor Levin Easterly Partners, credited the Detroit company’s “good steady drum beat” with news on advanced technology and EV. He thinks GM could be a $ 100 stock in a couple of years.

GM has helped change the narrative since November by increasing spending and accelerating the development of electric vehicles, announcing plans for an electric van and a dedicated unit to serve commercial customers and setting a goal to stop selling light-duty vehicles. gasoline in 2035.

Investors also attest to a broader market focus on electric vehicles, driven by Tesla Inc. and the numerous publicly traded companies through mergers with special purpose acquisition companies or SPACs.

“This never seemed to me like a business that green competitors had an insurmountable advantage,” said Josh Sandbulte, chief investment officer of Greenhaven Associates, one of GM’s largest shareholders.

Investors are starting to keep companies at a higher level in terms of their climate plans. Last month, the head of BlackRock, the world’s largest asset manager, warned companies he invests in that they will have to show a game plan to survive in a world that seeks clean emissions by the middle of the century.

Microsoft Corp.’s investment also increased GM’s shares last month in Cruise, the stand-alone business in which GM has a controlling stake. The cruise business went from a valuation of $ 19 billion to $ 30 billion with this deal, exceeding expectations.

Now, investors see that GM’s total parts business adds up to a much larger number, said Brian Johnson, a Barclays analyst.

“If you want to dream of GM on a large scale, you would take over the EV business in a Tesla multiple, the van (EV) business in a SPAC multiple and the Microsoft-branded cruise business,” said Johnson, who sees a positive case for a valuation of $ 100.