A 2024 Silverado EV RST.
Courtesy GM
Launches of new models typically aren’t stock-market issues for traditional auto manufacturers, but things are changing. General Motors
‘ unveiling of the all-electric Chevy Silverado at the CES on Wednesday is a case in point.
Electric vehicles’ share of new car sales is rising in the U.S. and around the globe, so any EV launch takes on increased importance. That is doubly so for trucks because pickups account for about 20% of all U.S. new car sales.
GM (ticker: GM) is one of the leaders in that business. It doesn’t want to lose market share to EV upstarts such as Rivian Automotive (RIVN).
The upshot is that the launch of the truck, and what the market has to say about it, has plenty of potential to move the stock. So far, Wall Street analysts seem to like the Silverado, but they would be more upbeat if it was hitting the market sooner.
“We view the Silverado specs as impressive, with the main differentiators being the range,” wrote Deutsche Bank analyst Emmanuel Rosner in a Thursday report. The Silverado will offer 400-plus miles of range, in certain configurations, which is more than the 300 miles of range for an electric F-150 Lightning coming in 2022 from Ford Motor (F).
“Another large differentiator is Silverado’s use of 350 kw/800V fast charging, versus Ford up to 150 kw,” added the analyst. That means that Chevy is equipping the Silverado to accept more electricity when charging, giving it more range, more quickly.
Rosner rates GM stock at Buy. He has a target of $67 for the stock price, while the shares were down 0.7% at $62.33 in late morning.
Benchmark analyst Mike Ward, who also rates the shares at Buy, has a target of $65 for the price. Like Rosner, he noted that the truck has a long range, but he also pointed out that it will arrive on the market relatively late.
The Silverado is due to be produced in the first quarter of 2023, “about one-year behind the F150 Lightning,” Ward wrote. GM will launch the GMC Sierra EV, the GMC version of the Silverado, in the second half of 2023. It is already selling the all-electric pickup version of the GMC Hummer.
Citigroup analyst Itay Michaeli has concerns about timing as well. He said that while the truck will be available in 2023, as investors expected, it will take GM some time to launch versions with all the various trim levels. The least expensive version, at $40,000, won’t reach the market until 2024, he said.
Potential buyers will be able to choose between the Tesla (TSLA) Cybertruck, the Rivian R1T, the Ford F-150 and some others this year.
Nonetheless, Michaeli is upbeat about GM. He rates the stock at Buy and has a target of $96 for the price. That is the highest on Wall Street, according to Bloomberg.
It is hard to find a downbeat call on GM stock. Twenty-two of the 25 analysts covering the company rate the shares at Buy. There are three Holds and no Sell ratings.
GM stock fell Wednesday after the Silverado was unveiled, but it isn’t clear if the decline was due to investors’ opinion of the truck. The whole market sold off in response to the release of the minutes from the Federal Reserve’s December monetary-policy meeting.
Investors knew rate increases were on the cards, but the minutes indicated the bank may act more aggressively to rein in inflation than had been expected. That would spell trouble for economic growth, corporate earnings, and stock prices.
GM stock is still up about 7% year to date. The S&P 500 and Dow Jones Industrial Average are down 1.2% and 0.2%, respectively.
Source: finance.yahoo.com