Ambitious Plans of General Motors Push Shares Upwards
4 minutes for reading
In August the shares of General Motors, alongside the securities of Volkswagen and Toyota, were falling steadily due to plants put to a halt because of a shortage of chips used in electronic systems of cars. The shares kept stumbling at the lows until the end of the second decade of September, but later the charts bloomed with an uptrend.
In GM, they might have thought about how to cheer up investors even more. Recalling the experience of Ford Motor Company, the shares of which leaped up by 8.5% after the Investor Day, the managers decided to organize a presentation about the bright future of the company and their ambitious plans coming to life.
Let’s discuss the presentation: what statements were made, and how the shares reacted. Also, I’ll treat you on a fresh tech analysis by Maksim Artyomov.
Investor Day in GM: more profit, electric cars, and innovations
On October 6th, the company organized an Investor Day, making a detailed presentation of its plans for the future, ambitions, and aims. And this is not about 3-5 years: they voiced a strategy for a decade. Realizing current trends in the global car industry, it’s easy to guess that the main statements touched upon the theme of electric cars in this or that way.
Main statements of the presentations
Firstly, by 2030, the company is planning to increase its annual revenue by 100%, i.e. from $140 billion to $280 billion. Well, why be shy, after all? Dance as if no one sees you; plan as if there were no other car-makers in the world.
Secondly, GM is ready to fight for its life in the market of electric cars. In the next four years, the company plans to invest almost $35 billion in making new models of electric cars and batteries for them.
This should allow the giant to gain up to $10 billion on selling electric cars by 2023, and by 2030 – raise this result to $90 billion. This is quite ambitious; hence, this is the “thirdly” point.
Fourthly, the company is ready to rival other car-makers in the field of autopilots. On the Investor Day, GM presented Ultra Cruise, a technology that helps drive vehicles. This is an upgraded version of Super Cruise already installed on several GM models.
Fifthly, they plan that Cruise, a department of the company that works on autonomous driving solutions (the technology mentioned above is their product), will have produced 1 million of fully autonomous cars by 2030, thus reaching a profit of $50 billion.
Sixthly (did you think the event was boring?), the corporation is going to develop the sphere of extra services on subscription. The annual revenue is planned at $25 billion.
Shares of General Motors growing by 9% over two days
Wall Street experts reacted to the voiced plans quite positively. Many analysts are sure that even if a part of these goals will be reached, this will be a good result for the company.
On October 7th, the shares of General Motors (NYSE: GM) grew by 4.65% to $56.44. The last trading session closed with growth by 3.77% to $58.57. This makes growth by almost 9% over two days. During autumn, the shares rose by 20.3% and by 41.6% - since the beginning of the year.
Tech analysis of General Motors shares by Maksim Artyomov
On D1, the shares keep growing. After the recent news, the quotations broke through the 200-days Moving Average and are securing their positions. Judging by the breakaway of the upper border of the correctional channel, I would call this movement a beginning of an uptrend.
Current moods of investors might do good for the future of the company. The aim for the nearest future, as long as the uptrend is recovering, might be the resistance level of $64.
Summing up
An American car-maker General Motors had an Investor Day, on which the representatives of the company voiced their forecasts for the nearest decade. The statements were quite ambitious and bold.
Meanwhile, Wall Street experts are positive about the future of the car company. For example, Daniel Ives, a Wedbush analysis, is sure that the whole list of tasks will come to life in time. The securities of the giant grew by almost 9% over two days.
