General Motors Co
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$86.00 | Hhsb | Ppmcrqntj |
We Like GM Buying Back About 25% of Its Stock in Late 2023 and 2024
Business Strategy and Outlook
We see General Motors with a competitive lineup in all segments it competes in, combined with a reduced cost base, finally enabling it to have the scale to match its size. We think GM's earnings potential is excellent because the company has a healthy North American unit and a nearly mature finance arm with GM Financial. Moving hourly workers' retiree healthcare to a separate fund and closing plants drastically lowered GM North America's breakeven point to U.S. industry sales of about 10 million-11 million vehicles, assuming 18%-19% share. We expect more scale to come from GM moving its production onto vehicle sets over the next few years and a joint venture making EV batteries for even more flexibility and scale.