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General Motors Co GM

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GM Is Moving Far Beyond Just Selling the Vehicle and Financing as It Pivots Toward Data Analytics

Analyst Note

| David Whiston, CFA, CPA, CFE |

We attended General Motors' Oct. 6-7 investor event and saw it as a way for management to show that GM is no longer just an automaker. Management unveiled aggressive but not impossible 2030 financial targets, including a roughly doubling of revenue including GM Financial to $275 billion-$315 billion, with about $80 billion from Cruise and new businesses. We are raising our fair value estimate to $68 per share from $62 to factor in slightly more 2025 revenue than we were modeling and higher long-term profitability metrics in Stage II of our model to account for the much higher-margin profile of these new asset-light businesses. Management also is guiding for total company EBIT margin by 2030 of 12%-14%; we have raised our midcycle 2025 EBIT margin by 50 basis points excluding equity income to 6.2%. We will continue to review our midcycle margin assumption as the company progresses through its transformative strategy.

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Company Profile

Business Description

General Motors Co. emerged from the bankruptcy of General Motors Corp. (old GM) in July 2009. GM has eight brands and operates under four segments: GM North America, GM International, Cruise, and GM Financial. The United States now has four brands instead of eight under old GM. The company remains the market leader in the U.S. with 17.3% share in 2020. GM Financial became the company's captive finance arm in October 2010 via the purchase of AmeriCredit.

300 Renaissance Center
Detroit, MI, 48265-3000
T +1 313 667-1500
Sector Consumer Cyclical
Industry Auto Manufacturers
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 155,000