General Motors Company

GM Details

General Motors Company (NASDAQ: GM) designs, build, and sells trucks crossovers, cars, and automobile part and provides software-enabled services and subscriptions globally.

Financial Results for Q4 FY22 & FY22

• The total net sales revenue for FY22 was reported at USD 156.73 bn as compared to the total net sales revenue of USD 127.00 bn in FY21. The Automotive segment reported combined sales of USD 143.97 bn in FY22 against USD 113.59 bn in FY21
• The adjusted EBIT stood at USD 14.5 Bn in the reported period (FY22) when measured against USD 14.3 bn in FY21. The outstanding results were because of wholesale volume growth as well as robust pricing throughout the portfolio, partially offset by mix normalization as well as commodity costs.

Key Update

GM and GlobalFoundries announced the strategic, long-term agreement establishing the dedicated capacity corridor exclusively for GM’s chip supply.

Outlook

For the full year 2023, the company is expecting Net Income attributable to stockholders to be between USD 8.7 bn and USD 10.1 bn. Further, the management is optimistic and estimating adjusted EBIT to range from USD 10.5 bn to USD 12.5 bn for FY23.   

Key Risks

The company is exposed to a slowdown in economic activity along with the increase in commodity prices. Other key risks for the group are increasing competition, currency volatility, etc.

Valuation Methodology: EV/Sales-Based Relative Valuation (Illustrative)

Stock Recommendation

The stock is trading above the average price of the 52-week low-high range for the stock at USD 30.33- USD 50.565, respectively.

The stock has been valued using EV/Sales multiple-based illustrative relative valuation, and the target price so arrived reflects a fall of low double-digit (in % terms). A slight discount has been applied to EV/Sales Multiple (NTM) (Peer Average) considering the current trading levels and risks associated.

Resultantly, it is prudent to liquidate the stock at the current levels.

Hence, a ‘Sell’ rating has been provided on the stock at the closing price of USD43.10 per share, up by 0.35% as of 16^th February 2023.

Technical Overview:

Daily Price Chart

General Motors Company (GM) is a part of Kalkine’s Global Fully Charged Product

Markets are trading in a highly volatile zone currently due to certain macroeconomic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for share price chart and stock valuation is based on February 16, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.