New model launches aren’t usually stock market problems for mainstream automakers, but things are changing.
The unveiling of the all-electric Chevrolet Silverado at CES on Wednesday is a case in point.
The share of electric vehicles in new car sales is increasing in the United States and around the world, so any electric vehicle launch is gaining in importance. This is doubly the case for trucks, as pickup trucks account for about 20% of all new car sales in the United States.
GM (ticker: GM) is one of the leaders in this field. It doesn’t want to lose market share to new electric vehicle entrants like Rivian Automotive (RIVN).
The bottom line is that the truck launch, and what the market has to say about it, has a lot of potential to move the stock. So far, Wall Street analysts seem to like Silverado, but would be more bullish if it hits the market sooner.
“We see the Silverado’s specs as impressive, the main differentiators being the lineup,” Deutsche Bank analyst Emmanuel Rosner wrote in a report on Thursday. The Silverado will offer more than 400 miles of range, in some configurations, which is more than the 300 miles of range of an electric F-150 Lightning coming in 2022 from
“Another big differentiator is Silverado’s use of a 350kw / 800V fast charge, compared to Ford up to 150kw,” the analyst added. This means that Chevrolet equips the Silverado to accept more electricity when charging, which gives it more range, faster.
Rosner rates GM stock for Buy. He has a target of $ 67 for the share price, as shares were down 0.7% to $ 62.33 by late morning.
Benchmark analyst Mike Ward, who also rates stocks at Buy, has a price target of $ 65. Like Rosner, he noted that the truck has a long range, but also pointed out that it will hit the market relatively late.
The Silverado is expected to be produced in the first quarter of 2023, “about a year after the F150 Lightning,” Ward wrote. GM will release the GMC Sierra EV, the GMC version of the Silverado, in the second half of 2023. It already sells the all-electric pickup version of the GMC Hummer.
Citigroup analyst Itay Michaeli also has timing concerns. He said that while the truck will be available in 2023, as investors expected, it will take some time for GM to release versions with all different trim levels. The cheapest version, at $ 40,000, won’t hit the market until 2024, he said.
Potential buyers will be able to choose between
(TSLA) Cybertruck, the Rivian R1T, the Ford F-150 and a few more this year.
Still, Michaeli is optimistic about GM. It rates the stock at Buy and has a target of $ 96 for the price. It’s the highest on Wall Street, according to Bloomberg.
It’s hard to find a negative opinion on GM stocks. Twenty-two of the 25 analysts covering the company are rating the stocks at Buy. There are three keep ratings and no sell ratings.
GM shares fell on Wednesday after the Silverado was unveiled, but it’s not clear whether the drop was due to investor sentiment on the truck. The entire market sold off in response to the release of the minutes of the Federal Reserve’s monetary policy meeting in December.
Investors knew rate hikes were being considered, but the minutes indicated the bank may act more aggressively than expected to contain inflation. This would cause problems for economic growth, corporate profits and stock prices.
GM’s stock is still up about 7% year-to-date. the
Dow Jones Industrial Average
are down 1.2% and 0.2% respectively.