Profits aside, GM's EV plans are driving a now-rising stock
By Ben Klayman
DETROIT, Feb 10 (Reuters) - General Motors Co isexpected to report a healthy fourth-quarter profit on Wednesdaythanks to strong demand for gas-burning pickup trucks and SUVs,but the company's future electric vehicles are now driving thestock, shareholders and analysts said.
Since November, when Chief Executive Mary Barra outlinedplans to boost spending on electric vehicles, GM shares havesurged by 60%. Long stuck near the 2010 initial public offeringprice of $33, the increase has long-time shareholderscelebrating.
"I don't think there's ever been a more exciting time to bea GM shareholder," said Michael Razewski, a partner with DouglasC. Lane & Associates, which owns more than 2.84 million shares.
Chris Susanin, director research at GM investor LevinEasterly Partners credited the Detroit company's "nice steadydrum beat" of EV and advanced technology news. He thinks GMcould be a $100 stock within a couple years.
GM helped change the narrative since November by boostingspending on and speeding development of EVs, announcing plansfor an electric van and dedicated unit to serve commercialcustomers, and setting a target to stop selling gasoline-poweredlight vehicles by 2035.
Investors also credit a greater focus by the broader marketon EVs, driven by Tesla Inc and the numerous companiesgoing public through mergers with special-purpose acquisitioncompanies, or SPACs.
"This never struck me as a business that greenfieldcompetitors had an insurmountable advantage," said JoshSandbulte, chief investment officer with Greenhaven Associates,one of GM's largest shareholders.
Investors are starting to hold companies to a higherstandard regarding their climate plans. Last month, the head ofBlackRock, the world's biggest asset manager, warnedcompanies it invests in they will need to show a game plan forsurviving in a world aiming for net-zero emissions bymid-century.
Also boosting GM's stock was Microsoft Corp'sinvestment last month in Cruise, the self-driving business inwhich GM holds a controlling stake. The Cruise business wentfrom a $19 billion valuation to $30 billion with that deal,supercharging expectations.
Investors now see GM's sum-of-the-parts business adding upto a much larger number, Barclays analyst Brian Johnson said.
"If you want to dream big on GM, you'd take the EV businessat a Tesla multiple, the (EV) van business at a SPAC multipleand the Cruise business at the Microsoft mark," said Johnson,who sees an upside case for a $100 share valuation.
(Reporting by Ben Klayman in DetroitEditing by Nick Zieminski)
