General Motors Co (NYSE: GM) is set to host its first investor day since November 2022, and investors are eager for updates on the automaker’s electric vehicle (EV) strategy.
Mike Ward, an analyst at Freedom Capital Markets, noted that GM’s EV business will be a key focus during the event.
The company has committed to building at least 200,000 EVs in 2024 and aims to achieve positive variable profits in this segment by year-end.
Ahead of the event, GM shares have risen more than 30% from their January year-to-date low, reflecting optimism about the company’s progress in the EV market.
What to expect from GM investor day
In addition to EV profitability, investors will look for updates on GM’s traditional automotive business.
With concerns of a potential economic slowdown on the horizon, GM needs to reassure shareholders that its legacy operations will continue to generate solid profits and free cash flow, even in a possible recession.
Emmanuel Rosner, an analyst at Wolfe Research, highlighted that expectations for GM’s legacy business are currently low, with investors forecasting declining operating profits and free cash flow in 2025, alongside significant EV losses.
This conservative outlook provides GM the opportunity to deliver more positive news than anticipated.
Another area of interest at the investor event is GM’s autonomous driving division, Cruise.
Despite facing regulatory challenges in California, GM remains committed to the self-driving taxi unit.
Uber is set to integrate Cruise vehicles into its fleet under an agreement signed with GM in August, signaling continued momentum for the autonomous venture.
Is GM stock a buy ahead of investor day?
Despite challenges in the EV space, GM’s traditional car business continues to generate substantial profits.
The company is expected to produce around $8.4 billion in free cash flow by 2025.
A confirmation from management regarding the continuation of dividend payments and stock buybacks, even in a slowing economy, could provide a boost to GM’s stock.
Investors will be keen to hear any assurances from the company in this regard.
Goldman Sachs recently reiterated its “buy” rating on GM shares, with a price target of $61—representing a potential 35% upside.
The investment firm cited GM’s long-term profit potential, cost discipline, and capital allocation strategy as key drivers for its bullish outlook.
GM is also set to release its third-quarter earnings on October 22, with analysts expecting the company to report earnings of $2.54 per share, compared to $2.28 per share a year ago.
The investor day will provide a critical opportunity for GM to address concerns and highlight its strategies as it navigates both traditional and emerging markets.
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