The value of GM stock fell during the week of October 25th to October 29th, 2021, compared to the stock’s closing value the week prior. Shares closed this week at $54.43 per share, representing a decrease of $3.34, or 5.78 percent compared to the previous week’s closing of $57.77.
Movement & Range
By comparison, shares of GM’s cross-town rival, Ford Motor Company, increased 4.91 percent, or $0.80, during the same timeframe.
GM Stock Factors
GM stock value dropped this week after stable performance last week and a small decline the week prior.
The most impactful factor influencing GM stock value this week were GM’s Q3 2021 earnings, headlined by $2.4 billion in income on $26.8 billion in revenue, a 40-percent decline in income and 25-percent decline in revenue. Investors reacted with disappointment to the automaker’s 2021 profit forecast in the wake of the ongoing global microchip shortage and increasing commodity prices.
However, GM CEO Mary Barra sought to buoy investor prospects by saying that General Motors could catch up to Tesla in EV sales by 2025. Additionally new details on GM’s BrightDrop commercial EV business were revealed, while limited production of the beleaguered Chevy Bolt EV and Chevy Bolt EUV is now set to resume in November. GM also announced plans to build 40,000 new charging stations throughout North America.
Finally, General motors unveiled the new 2023 Chevy Corvette Z06 sports car.
GM Stock Value Macro Factors – Strategy
During the recent GM Investor Day event, GM announced several future plans regarding its business, strategy and products. It expects to double its revenue by 2030 through new software platforms and connectivity, as well as the integration of OnStar Insurance with the vehicle purchase process.
Thanks to its electric and autonomous vehicle strategy incorporating Ultium batteries and Ultium Drive powertrains, investor firm Tudor Pickering raised its GM stock price target from $75 to $95. On the money side of business, General Motors will launch Cadillac Financial in 2022, creating a more customized experience for Cadillac luxury brand shoppers.
In November, GM CEO Mary Barra shared the company’s plan to launch a total of 30 new electric vehicles globally by 2025, with a total investment of $7 billion. To put that in perspective, 40 percent of GM’s offerings will be fully electric by the end of 2025, compared to just three percent in 2021.
GM also announced an increase in EV and AV investment, with a whopping $35 billion earmarked between now and 2025. Additionally, GM has announced an investment of $71 million for the new Advanced Design and Technology campus in Pasadena, and a cash infusion for AI vision software company Algolux.
More recently, GM laid out its plans to roll out new software such as the Future Roads data platform, enhanced subscription services, and the expansion of the OnStar Insurance service to all 50 states by 2022. GM’s Cruise autonomous vehicle brand is expected to rake in $50 billion over the coming years. On the production front, half of all GM North American and Chinese production facilities will be capable of producing electric vehicles by 2030. GM also announced details for hotly anticipated future products like the Chevy Silverado EV and 2023 Chevy Corvette Z06.
GM Stock Value Macro Factors – Sales
General Motors has reported its third-quarter sales figures, headlined by a 33-percent decrease in sales in the U.S., down to 446,997 units. Sales decreased at all four of GM’s U.S. brands. GM cites supply disruptions resulting from the ongoing global microchip shortage, but adds that supplies are currently “improving.”
General Motors posted a 34-percent sales gain for the Canadian market, as well as a 5-percent increase in China where GM just opened its expanded Advanced Design Center. However, Toyota outsold the General in the U.S. during the second quarter of the year, although by only 577 units.
GM China sales were down 19 percent in Q3 2021 and GM Mexico sales dropped by 30 percent in September. On a brighter note, SAIC-GM-Wuling’s fully electric minicar in China, the Wuling Hong Guang MINI EV, recently reached the milestone of 400,000 units produced since its launch in 2020.
Previously, second-quarter sales were headlined by a 40-percent jump in the U.S., with sales increasing for all four of GM’s U.S. brands. Further back, first quarter sales for the 2021 calendar year included an increase of 4 percent to 642,250 units in the U.S. market. Sales increased at Buick, Cadillac, and GMC brands, while sales decreased at Chevrolet.
|Q1 20211||Q4 20201||Q3 20201||Q2 20201||Q1 20201|
|– U. S.||642||771||665||492||618|
|Asia/Pacific, Middle East and Africa2||880||1,082||903||844||605|
- In thousands (000s)
- Total is in GM markets
GM Stock Value Macro Factors – Earnings
GM’s Q2 2021 earnings results were recently released, headlined by $2.8 billion in income on $34.2 billion in revenue. The figures represent a 450-percent jump in income and 103-percent increase in revenue.
Earlier in the year, GM reported its Q1 2021 earnings, including $3 billion on $32.5 billion in revenue, a 900-percent jump in income and 0.6 percent decrease in revenue compared to Q1 of 2020. GM stated that the earnings were driven by strong price and mix performance in North America, as well as strong credit and residual value performance at GM Financial, and industry recovery in China.
GM Q1 2021 Earnings SummaryFigures in billions of USD, except for per share amounts and percentages.
|METRIC||Q1 2021||Q1 2020||Q1 2021 - Q1 2020||% CHANGE Q1 2021 / Q1 2020|
|NET INCOME MARGIN||9.3%||0.9%||8.4%||N/A|
|AUTOMOTIVE OPERATING CASH FLOW||-$1.1||$0.3||$-1.40||-311.1%|
|EARNINGS PER SHARE (EPS) DILUTED||$2.03||$0.17||$+1.86||+1094.1%|
|NON GAAP METRICS|
|% EBIT-ADJUSTED MARGIN||13.6%||3.8%||9.8%||N/A|
|ADJUSTED AUTOMOTIVE FREE CASH FLOW||-$1.9||$0.9||$-2.80||-311.1%|
|EPS DILUTED - ADJUSTED||$2.25||$0.62||$+1.63||+262.9%|
|GM NORTH AMERICA EBIT-ADJUSTED||$3.1||$2.2||$+0.90||+40.9%|
|GM NORTH AMERICA EBIT-ADJUSTED MARGIN||12.1%||8.5%||3.6%||N/A|
|GM INTERNATIONAL EBIT-ADJUSTED||$0.3||-$0.6||$+0.90||+150%|
|- CHINA EQUITY INCOME||$0.3||-$0.2||$+0.50||+250%|
|GM FINANCIAL EBT-ADJUSTED||$1.2||$0.2||$+1.00||+500%|
GM Stock Value Macro Factors – Products
The recent debut of the fully refreshed 2022 GMC Sierra 1500 includes two new trim levels, new styling, the latest technology features, and more. GM also recently unveiled the new Chevrolet Performance ZZ632 crate engine.
As GM’s Factory Zero facility nears completion, the first pre-production units of the GMC Hummer EV pickup have started to roll down the assembly line. GM also recently debuted the BrightDrop EV600 all-electric light commercial vehicle. The new van is the fastest-developed vehicle in GM history.
On the software front, GM debuted its new Ultifi end-to-end software platform, designed to provide the latest upgrades and features to future GM vehicles via over-the-air updates.
General Motors also recently debuted the refreshed 2022 Chevy Silverado 1500, which introduces a raft of changes and updates over the preceding 2021 model year and pre-refresh 2022 Chevy Silverado 1500 Limited, such as an all-new interior, updated technology, and the new Silverado ZR2 off-roader.
GM stock values rose considerably in April, driven primarily by confirmation of an upcoming all-electric iteration of the popular Chevy Silverado pickup truck. GM stock value hit a record high of $63.44 per share following the announcement, surpassing the $64 mark the second week of June and setting a new record for the “new GM.”
Much of the upward momentum in GM stock value seen in January was attributed to the automaker’s latest all-electric vehicle efforts, debuts, and strategy, which includes an in-depth presentation released during the Consumer Electronics Show (CES) tech conference. Highlights from the presentation include the launch of BrightDrop, a new business venture aimed at providing last-mile electric delivery solutions, software, and services to delivery and logistics companies. In late June, GM announced an accelerated timeline for conversion of the GM CAMI Assembly plant in Ingersoll as the all-electric BrightDrop EV600 light commercial vehicle heads towards production.
Cadillac dealerships are now preparing for the arrival of the Lyriq and future all-electric Cadillac models with a slew of upgrades. The new Lyriq is expected to enter production at the end of March in the 2022 calendar year.
What’s more, GM announced the new Ultra Cruise autonomous driving system, which promises true “door-to-door hands-free driving” capabilities in 95 percent of all driving scenarios, with plans to eventually make the system available on every paved road in the U.S. and Canada.
GM Stock Value Macro Factors – Events
The global microchip shortage continues, affecting GM stock value by impacting production, vehicle supply, and pricing. A recent analysis predicts that the shortage may end up costing the global auto industry upwards of $210 billion in lost revenue, almost twice what was originally forecast. General Motors president Mark Reuss recently indicated that he expects the microchip supply to stabilize at a lower level than desired for full recovery. General Motors is also currently gearing up to make significant changes to its supply chain the hopes of avoiding future shortages. However, there was also news that a magnesium shortage in China may affect aluminum production, as well as the auto industry.
In the meantime, GM has announced that it has shipped half of the pickup truck models stockpiled per the automaker’s “build-shy” strategy. SAIC-GM-Wuling has announced that it is developing its own microchips, which could help to soften the blow of future chip shortages. GM CFO Paul Jacobson also indicated that the chip supply is expected to even out sometime next year as suppliers catch up to demand.
Recently, GM announced new production stoppages at several of its North American facilities, including Wentzville, Lansing Grand River, Lansing Delta, and Ramos Arizpe, among others. The new production stoppages affect a broad variety of GM vehicles, including the the Chevy Colorado, GMC Canyon, Chevy Camaro, Cadillac Blackwing sedans, Chevy Traverse, Buick Enclave, and Chevy Blazer. Production of some of the company’s most profitable vehicles, the Chevrolet Silverado 1500 and GMC Sierra 1500, was halted for a week due to the ongoing microchip shortage.
Experts are now predicting that the semiconductor crisis could last in 2023. In addition, the most fuel-efficient engine available in GM’s full-size trucks and SUVs, the Duramax turbodiesel 3.0L LM2 inline-six, has also seen production come to a halt due to supplier issues. As production of GM’s six-speed automatic transmission winds down, the company announced that it will be laying off workers at its Toledo Transmission Plant.
It was previously reported that GM is stockpiling unfinished vehicles waiting for new chips to arrive in a “build-shy” strategy intended to keep production rolling. Additionally, GM is building select units of the 2021 Chevy Silverado 1500 and 2021 GMC Sierra 1500 without certain fuel-saving technologies as a result of the shortage, including automatic engine stop-start. GM’s range of full-size SUVs is also rolling off the line without automatic stop-start.
An emergency funding proposal earmarks $52 billion to support domestic chip production, including funds to support construction of 10 new semiconductor chip plants. The bill recently passed the U.S. Senate.
In the face of dwindling vehicle inventory, GM Financial has announced it will stop end-of-lease purchases with non-GM dealers, thus prioritizing participating GM dealers with regard to access to vehicles reentering the market.
GM Stock Value Micro Factors
The General recently announced that LG Electronics Inc. has agreed to over $1.9 billion of the $2 billion in costs associated with the replacement of the recalled Chevy Bolt EV and Chevy Bolt EUV battery packs. Meanwhile, production of the two electric crossovers is on pause for another two weeks.
The announcement follows news that GM will replace the battery modules on roughly 50,000 units of the 2017 though 2019 Chevy Bolt EV affected by a potential fire risk. The automaker also decided to extend the battery replacement on all model years of the Bolt EV in addition to the all-new Bolt EUV. Despite the fault laying with battery producer LG Energy Solution, GM CEO Mary Barra announced that GM will continue its relationship with LG going forward.
Several other GM recalls have also been announced in recent months, the most significant of which involves roof rail airbags that could rupture in more than 400,000 units of the Chevy Silverado and GMC Sierra, followed by a block heater cable short circuit issue in some 330,000 units of the Silverado HD and Sierra HD.
In legal news, a class action lawsuit filed against General Motors regarding oil consumption issues for the 5.3L V8 was dismissed in Virginia. Additionally, General Motors and its autonomous vehicle subsidiary, Cruise, came to a settlement after filing a lawsuit against Ford over its BlueCruise highway driving assistant system. Recently, a judge recently tossed out a lawsuit filed by General Motors against Fiat Chrysler/Stellantis regarding accusations regarding a labor conspiracy.
In political news, General Motors voiced support for the EPA’s proposed emissions rule changes. GM also indicated that it is on track to hit carbon neutrality for its U.S. operations by 2025, five years earlier than originally announced. The Biden administration recently proposed a new EV incentive offering point-of-sale rebates on new electric vehicles. Earlier this year, lawmakers urged the EPA to reinstate California’s right to set its own vehicle emission rules, while the Biden administration is urging automakers to ensure that their vehicle lineups consist of at least 40 percent EVs by 2030.
Good news recently came out of Asia, as GM Korea recently reached an agreement with workers regarding a wage increase. Further good news comes from Mexico as well following the resolution of a labor dispute at the GM Silao production facility. In America, the greater auto industry, including the UAW workers union and major manufacturers like General Motors, previously called on President Biden to roll out tax credits and incentives to drive EV sales. The latest is that the Biden Administration plans to roll out a $100 billion plan for new EV rebates.
Stock Performance Year-To-Date
GM stock value has increased considerably over the past year, only to later rescind some of those gains and fall below the $50-per-share mark.
Some of the biggest gains were seen in January, during which GM stock value peaked around $55 per share, before falling later in the month. In February, GM stock value clawed its way back to the mid-$55 range before falling to $50 per share in early March.
GM stock value saw steady gains throughout the month of March before dipping again later in the month, only to rise to record-breaking heights in early April, once again breaking the $60-per-share mark. GM stock value dipped through the month of May, but reached $64 per share the second week of June, setting a new record for the “new GM.”
GM stock value began to slide around mid-June, dipping below the $60-per-share mark in July. In September, GM stock value remained around $50-per-share, and rising considerably in the first few weeks of October.