Should you invest in GM as it confirms plans to make a new all-electric truck?

on Jul 20, 2021
  • General Motors shares jumped 3.53% higher on Tuesday after it confirmed plans for an all-electric truck.
  • GM is launching a new full-sized EV pickup truck under its GMC nameplate.
  • The company said the new EV would target the mainstream crowd, a rapidly growing market segment.

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General Motors Co. (NYSE:GM) shares popped 3.53% on Tuesday after the US automobile manufacturer confirmed it is planning to make an all-electric pickup truck. The new EV will be a full-sized EV under GM’s GMC nameplate and will target the mainstream crowd market.

General Motors is also launching an all-electric GMC Hummer and another EV to rival Chevy’s Silverado. The company plans to launch at least 30 new EV models worldwide by the year 2025.

The electric vehicles market has attracted several players following the success of Tesla Inc. (NASDAQ:TSLA). 

General Motors plans to completely phase out vehicles using internal combustion engines by the year 2035.

Is GM stock a buy in Q3 2021?

From a valuation perspective, GM shares trade at an attractive P/E ratio of 9.07, making the stock compelling to value investors. In addition, GM’s forward P/E ratio of about 7.73 also implies significant undervaluation. 

Analysts expect GM earnings per share to decline by 5.30% this year before growing at an average annual rate of about 13.51% over the next five years. Therefore, General Motors will also be an exciting investment opportunity for growth investors.

Source – TradingView

Technical overview: General Motors stock price forecast for Q3 2021

Technically, General Motors stock appears to have recently bounced back to avoid falling to oversold conditions in the 14-day RSI. In addition, the GM share price fell below the 100-day moving average for the first time since July last year, but it now seems poised to climb back above it. Thus, Tuesday’s rebound could be the perfect catalyst for extended gains.

Therefore, investors can target short-term profits at approximately $59.01 or higher at $63.86. The key support levels are $52.89 and $49.30.

Bottom line: the catalyst for buying General Motors shares now

In summary, General Motors’ plans to launch a new all-electric pickup truck targets a strategic segment of the EV market. The truck adds to its growing pipeline of EVs and pushes it closer to its target of launching at least 30 new EV models by the year 2025.

The company’s current valuation multiples make the stock attractive for value investors, while Tuesday’s rebound could be a catalyst for extended gains.