General Motors Share Forecast September 2021 – Time To Buy GM?

Shares of the reputable American automotive company General Motors (NYSE: GM) are in the red today, after closing at $48.42 on September 9th (23:31 UTC-4). On what turned out to be an overall poor trading period for the share market, shares of General Motors Co. falling 1.12 per cent down to $48.42 on Thursday, with the S&P 500 Index SPX, dropping 0.46 per cent to 4,493.28. Is this dip indicates a long-term potential or GM shares are better off avoiding at this moment? Let’s find out.

General Motors – Technical Analysis

According to the financial statement from General Motors, the market cap of the multinational automotive corporation is at $70.292 billion with a total asset worth $241.803 billion. Where the total revenue was at $122.48 billion in 2020, in 2019 it was at $137.24 billion.

Moving averages for GM shares such as Exponential Moving Average (10) (49.08), Simple Moving Average (10)(48.96), Exponential Moving Average (20)(50.15), and Simple Moving Average (20)(49.87) are pointing towards selling. Oscillators such as Relative Strength Index (14)(35.32), Stochastic %K (14, 3, 3)(47.55), Commodity Channel Index (20)(−73.54), and Average Directional Index (14)(35.13) are neutral.

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Recent Developments

GM’s shares dropped approximately 24 per cent from its 52-week record of $64 as speculators analyse the effects of the sector-wide chip shortage, which prompted the corporation to cut output at 8 of its North American assembly facilities in September. However, management is taking efforts to ensure that operations continue to run smoothly during this difficult phase.

GM’s engineers are working to retain manufacturing output as high as achievable, as per CEO Mary Barra, by employing more widely obtainable processors and discovering substitutes to semiconductors. GM has been able to increase the manufacturing of its most popular automobiles as a result of these initiatives.

The company is trying to take advantage of its production restrictions to focus on more promising sectors such as pickup trucks and SUVs, resulting in adjusted profits before interest and taxes (EBIT) of $4.1 billion. In full-year 2021, management forecasts adjusted profits per share of $5.40 to $6.40, up from $4.82 per share prior to the pandemic in 2019.

Should You Buy General Motors Shares?

GM predicts positive growth in 2021, considering the chip scarcity, suggesting that the share’s decline may be overstated. However, it is uncertain when the situation will resolve, with many experts estimating that it would endure until 2023. As a result, shareholders should focus on GM’s long-term success strategy, which is dependent on green technology. GM intends to release 30 additional electric vehicles by 2025, giving it a significant competitive edge because of its extensive logistical infrastructure and size. The business has already taken the opportunity of the above, proposing plans to convert one of its Detroit plants into an electric car assembly plant known as Factory ZERO.

BrightDrop, GM’s mobility business, is yet another long-term growth catalyst. Although it’s too soon to forecast BrightDrop’s eventual market share, the initiative is promising since it indicates GM’s ability to move from a traditional automaker to a diverse green technology corporation.

Shares that trade at a low price-to-earnings ratio when compared to their earnings and future prospects are termed value stocks. Whereas the chip shortage is a short-term issue for GM, its enormous expenditures in electric car technology might give long-term shareholders a reason to be positive. As GM’s electric vehicle and green technology divisions expand, the market may reassess its share’s value. Therefore, in my opinion, now is a perfect opportunity to be a part of this remarkable transformation.

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