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How GM hopes to woo Wall Street during its two-day investor event

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Mary Barra is the CEO of General Motors and chairperson. She speaks on “EV Day,” March 4, 2020 at their tech-design campus in Warren (Michigan), a suburb Detroit.

GM

DETROIT – Wall Street is expecting a lot from General Motors’ two-day investor event that starts Wednesday afternoon  – from specific revenue and earnings targets to new details about its electric and autonomous vehicle operations.

GM shareholders really desire a plan for shareholder growth. The CEO has already tried to make it happen. Mary BarraHowever, they were never able to keep it.

FactSet reports that the stock price fluctuated dramatically under Barra’s leadership, with a 60 percent increase in share prices and almost as much drop since January 2014. GM’s shares had been declining since Barra became the CEO in January 2014. Now, they are up 36% with nearly all that growth occurring this year.

Analysts believe this type of growth could continue if GM delivers quickly on its plans to transform the company — at least in investor eyes — into more of a technology company than a traditional automaker.

“With the core objective of GM’s investor day centered on demonstrating the growth opportunities ahead for GM, we expect a case to be made for GM multiple expansion … which we believe it merits,” Credit Suisse analyst Dan Levy said in an investor note Friday. “We think there’s a compelling case to support GM stock at north $100.

Emmanuel Rosner, Deutsche Bank Analyst, said that the event could be a catalyst for the stock if GM fulfills investor expectations regarding electric and autonomous cars.

Morgan Stanley Analyst Adam Jonas identified several key growth areas, business opportunities, and questioned whether the event would “simply reinforce some of what many already believe” about GM. Or if it could catalyze a more important strategic change.

Barra and her executive management team hope for the former, just like investors. These are the five methods GM will try to make it happen.

Information

Expect an increase in returns for investors unprecedented amount of detailsDuring the event, there will be specific goals regarding revenue and profit margins, as well as the outlook for total market size in the early stages of expansion, such self-driving taxis.

Jonas stated that it is one of the two important things GM must accomplish. He said, in an investor note last Wednesday: “Provide transparency and disclosure for the analyst/investment community to model and value company’s key tech-oriented businesses units.”

Last year, GM generated revenue of $2.5 billion nearly $122.5 billion, down 10It is.8% compared with 2019 thanks largely to factory shutdowns at the beginning of the coronavirus pandemic. It made $6.4 Billion in net income in the last year, but its adjusted operating profits were $9.7 Billion, or $4.90 per share, for 2020.

Urgency

Electric Vehicles

GM announced that it will offer 30 new EVs to customers by 2025 under the terms of this investment. It is expected that the company will detail how it went from being an automaker dependent on internal combustion engines to solely offering electric vehicles. electric cars and trucks by 2035.

We remain positive about GM because we believe GM has a compelling EV strategy. It is one of the most ambitious and comprehensive EV strategies that legacy OEMs have. Levy added that while it is time for execution now, we are still waiting data to prove that GM can sustain market share and profitability within an EV environment.

In order to raise the company’s value to become more tech-based, such as Tesla at $740 billion, the overall investor event will provide a clear strategy. GM has a market capitalization of $79 billion.

AVs

Dan Ammann CEO, GM’s majority owned autonomous vehicle subsidiary CruiseInvestors will hear from, that the company sees an opportunity for ride-hailing to grow and reach $50 billion as it increases its operations.

Although he is not expected to give details about a timeframe for achieving this milestone, he is likely to describe how the company plans to do so. According to someone familiar with these plans which were previously reported by Bloomberg.

GM will also discuss details regarding its hands-free Super Cruise driver system. it has promised to offer on 22 models by 2023.

Software

GM is looking to improve recurring revenue, customer loyalty and profitability through a brand new software program for cars it has developed internally. It’s called “Ultifi.”

It’s almost like AppleOr GoogleGM plans to retain its customers using their iOS or Android operating system for personal electronics. GM also intends to push the Utifi and vehicles markets.

That’s an objective. The more we integrate our product into their lives and the better we make … certainly that’s what we want to achieve. Scott Miller, GM vice-president of software-defined vehicles, said that it is not a guarantee during a phone call last week.

Through software, apps and customized services that can all be updated remotely, the automaker hopes to incorporate its platform into customers’ digital lives. It could also include the purchase of new services like its hands-free highway driver system or other technologies.

– CNBC’s Michael BloomThis report was contributed by you.

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