General Motors Share Price Forecast March 2022 – Time to Buy GM?
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Shares of the American automotive manufacturing company General Motors (NYSE: GM) are in the green today after closing at $40.20 as of March 8th (19:59 EST). With a +0.93% surge in the share prices, experts are concluding the reason is GM’s new business launch in China. According to the reports, the company is planning to manufacture an “independently owned premium brand.”
General Motors – Technical Analysis
As per the financial statement, the market cap of the multinational automotive manufacturing corporation is $58.411 billion, with a total asset value of $244.718 billion. Revenue for the year 2021 was $127 billion, with a profit margin of 7.89%, compared to $122.48 billion in 2020.
Moving to the technical analysis, moving averages such as Exponential Moving Average (10)(43.98), Simple Moving Average (10)(44.51), Exponential Moving Average (20)(46.45), Simple Moving Average (20)(46.85) are indicating a sell action. Oscillators such as Stochastic %K (14, 3, 3)(3.23), Average Directional Index (14)(29.25), Bull Bear Power(−7.37), Ultimate Oscillator (7, 14, 28)(31.36) are neutral on the other hand.
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Recent Developments
The Detroit-based automotive manufacturing company is launching a new premium brand in China. Coined as “halo cars” by the automaker’s China chief, Julian Blissett, this new initiative will pertain to the premium category. General Motors will own the new business, as disclosed by the company spokesperson. The new halo cars feature high-performance technology with cutting-edge design.
This new premium brand is anticipated to specialise in increasing the sales of high-end GM vehicles. However, these are now unavailable in the Chinese market, as reported to the Chinese media outlets by Blissett.
These existing brands include Wuling, Chevrolet, Buick, and Baojun, which are owned by other joint-venture partners with the Shanghai-based company. The new venture intended to target the Chinese market will be completely owned by General Motors.
However, the halo cars are unlikely to be associated with any of the planned mass-market EVs that General Motors has already disclosed in the United States.
The automobile manufacturing corporation has yet to announce further details regarding the vehicle models it intends to sell in the Chinese market. Thus, the information regarding how the models are planned to be marketed is also yet to be disclosed at a later date, as per the GM spokesperson.
After the recent peak of $67.21 in January this year, the company has been noticing a sharp decline in the market price. This took a different direction due to the new business launch report. Thus, with the innovative all-electric Chevy Silverado, GM can hope to position itself as a leading EV manufacturer.
Should You Buy GM Shares?
The multinational company has yet to disclose further important details associated with the new launch. This initiative is undoubtedly beneficial for GM since it will focus on high-end luxury vehicles that have substantial demand in the market at this moment. Thus, it indicates a higher profit margin for the company.
Another strong factor that indicates the profit potential of General Motors shares in the future is that the company will own the brand rather than go into a joint venture with local companies. Thus, this minimises the possibility of losing intellectual property.
However, despite the potential of the new business in China, the profitability of investing in the shares is too early to decide. Thus, General Motors shares, for now, appear to be speculative shares. This is until additional details come to the surface.
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