GM stock prices hit their one-year low on October 30th, 2023, sinking to $26.79 during Monday trading, though their value has rebounded somewhat over the course of the week.
Now, investment bank Barclays says the recent historic fall in GM stock value represents a good opportunity to buy shares in The General, as reported by Bloomberg.Â
Monday’s share price is also significantly below the 12-month high of $43.63 GM stock registered on February 16th, 2023. At that point, investor sentiment was buoyed by GM’s – and the automotive market’s – accelerating rebound from the fallout of COVID-19 and the gradual resolution of supply chain problems.
Now, Barclays analyst David Levy gives GM stock a $37 price target, representing a 30-percent jump from its recent low. Levy also gave the stock the Barclays equivalent of a buy rating, alongside a similar rating for Ford, which he expects will see its stock value grow around 44 percent to $14 per share.
Levy says investors can expect the GM stock rebound because “the UAW strike has been the primary overhang the last few months,” but now GM and the union appear to have reached a likely agreement, with plants that were on strike recently now operational again. Levy adds that “full resolution will help the stocks.”
Levy points to several financial metrics to support his buy thesis to investors. These include the fact GM stock is trading at only a 4-times multiple of the automaker’s projected 2024 earnings, the smallest multiple in the 13 years since The General returned to being a publicly traded company. GM’s forward 12-month P/E ratio is 4.579 currently.
Additionally, the analyst expects “quite healthy” earnings per share (EPS) of $6 per share for GM, once again bolstering the argument investors should snap up the “historically cheap” stock.
Of course, a range of other macro factors, results of strategy, and international factors such as a strike at three GM Brazil plants will play into the value of GM stock. However, Barclays is confident for the moment that a window exists to buy shares in the automaker at an attractive price before a full post-Stand Up Strike recovery occurs.
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Comments
I have no idea what the market will decide about gm nor when, but I have no faith in the company currently.
Nice try in pumping stocks, lol.
If it’s so cheap then Barclays can have it.
They do
Great, since it’s such a guaranteed win-win, why don’t they skip trying to convince us to buy the stock and just buy it for us? Then that way they can share the profits with us when they’re proven right.
Hilarious, rising interests and inflation are great foundations for auto stocks??? GM will be less than $10, this time next year. Unless, a miracle happens in the economy.
cant wait to read the next report about ATP going up another 10%. just make MSRP 500k base and watch that ATP go up!
GM’s P/E is 4.04. Microsoft’s is 34.29. The reason GM has such a low P/E is because investors think it will go bankrupt within the next 10 to 15 years. Their costs are unsustainable and uncompetitive in the highly competitive and lucrative North American market.
Overall, the US stock market is undervalued with the Magnificent Seven driving most of the gains. Then we have to remember the effect of the Federal Reserve actions on interest rates along with the adage that ‘bad’ news is good news. So, with the latest round of news; it seems that the Federal Reserve will halt rate increases because the bond market is doing the ‘job’ so the Fed will pause hiking rates. Now what will happen when the Fed lowers rates; it’s a tailwind for the stock market. Plus, vehicle inventory seems to be normalizing at the dealerships; and then in 2024 you also have the $7500 deduction at the dealership for EV purchases. I wouldn’t be surprised to see GM stock be hit $50 by the end of 2024.