General Motors Company (NYSE: GM) has had an impeccable year of trading. Long term shareholders have been rewarded as the company has gained serious ground on Wallstreet. General Motors stock has gained 58% YTD, marking one of its best performing years since IPO. In addition, the analysts on Wallstreet are rallying behind the vehicle manufactuer. The average 12 month forecast from analysts in 2021 suggests an upside potential of 17%. This article will breakdown everything investors need to know regarding the GM stock forecast for 2022.
Table of contents
What are analysts forecasting for GM stock in 2022
Firstly, across the board of analysts the bullish sentiment is overwhelming for GM stock. Amongst 18 Wallstreet analysts, 15 have listed a Buy rating on the stock. The average 12 month forecast for coverage from analysts in 2021 is $63 a share (17% upside). The following are the more recent price targets, which show a clear trend of positive stock growth.
1/29/2021 Morgan Stanley – Analyst Adam Jones boosted the 12 month price target from $57 to $80 a share. This price boost sees an upside potential of 48% from the current trading price.
1/20/2021 Deutsche Bank – Analysts boosted the price target from $48 to $64 a share, suggesting an upside potential of 16%. The company has a buy rating on the stock.
1/14/2021 Argus – analysts upgraded their rating from a Hold to a Buy. The company has a $56 price target on the stock suggesting a 4% upside.
1/13/2021 Nomura Instinet’s – analysts increased their price target by almost double, from $27 a share to $60. Analysts at Nomura also upgraded the stock rating from Neutral to a Buy.
Financial forecasts for GM stock in 2021/22
Firstly, the revenue forecasts for the next 12 months look to provide some positive news for investors. The average revenue forecast for the fiscal year of 2021 is $137.31 Billion USD, which suggests an estimated YOY revenue increase of 17%. Looking into recent performance, the Q3 results saw the EPS surge to 2.83. The strong earnings result was “driven primarily by strong SUV and pickup-truck performance, cost actions and strong GMF results”. The average EPS forecast for the fiscal year of 2021 is expected to be 5.89, a further improvement from 2020.
GM investing in the future of EV
The motor industry is changing dramatically, in the past year alone we have seen the large shift towards a cleaner, energy efficient vehicle industry. Wallstreet has also seen some drastic changes, with EV manufacturers such as Tesla seeing serious stock growth. Simarily, General Motors has seen an immense shift in investor sentiment after announcing its intentions to exclusively offer only Electric vehicles by 2035.
External factors such as a shift in Government support for the adoption of Electric Vehicles to enable for a zero emission economy has excited investors on Wallstreet. The Moving forward Act in particular will place EV manufacturers such as GM in the drivers seat to help fund, develop and adopt electric vehicles onto the roads.
“We feel this is going to be the successful business model of the future…We know there are hurdles, we know there are technology challenges, but we’re confident that with the resources we have and the expertise we have that we’ll overcome those challenges and this will be a business model that we will be able to thrive in the future.”Dane Parker, GM chief sustainability officer, according to CNBC statement
We remind our viewers that this is not financial advice. Instead, the information above is investment commentary from extensive research.
In conclusion, the prospects for GM moving into 2021/22 have been illustrated by analyst price targets, positive revenue forecasts and a growing EV market. However, GM’s current stock price is just cooling off a 52 week high. With an increased interest in EV stocks, comes with it added speculation and increased expectations. This is something investors should price into their risk strategy. With the earnings to be announced on the 10th of February, we will continue to cover any updates as they occur.
Written by Tyger Fitzpatrick, Founder of Youth Investment Group.
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