Iconic Car Brands Compete for EV Space

General Motor Company (NYSE: GM) and Ford Motor Company (NYSE:F) is the oldest and largest automaker in the US In particular, with a rapidly changing preference towards cleaner and greener energy sources, the popularity of electric vehicles (EV) has overtaken traditional internal combustion engine (ICE) cars.

Both GM and Ford are also making efforts to launch EVs and gain a larger share of the EV market. Ford has plans to invest up to $50 billion in EV manufacturing over the next five to ten years. Ford has pledged to achieve carbon neutrality by 2050 and own 40% of all electric car volume by 2030.

Meanwhile, General Motors has pledged to go all-electric by 2035. In particular, GM plans to invest up to $30 billion into EV manufacturing by 2025, which is expected to launch around 30 EVs globally.

Let’s take a look at the efforts of the two iconic car brands in the EV industry.

Ford’s August Sales Impression

Ford sold a record 158,088 cars in August, growing 27.3% over August 2021, which was better than muted overall industry sales growth of 4.8%. Retail sales contributed to the strong 29.7% jump in the August figures. Remarkably, Ford’s EV sales jumped 307.3% to 5,897 cars in August.

Ford said that it was America’s best-selling car for the second time in a row. Notably, Ford’s market share increased to 13.4% in August 2022.

“The all-new electric F-150 Lightning had its best month since launch, while sales of our gas engine line grew 25%, electric vehicles 307%, and hybrids hit new sales records in August with 7,302 vehicles sold,” said Andrew Frick, Vice President, Sales, Distribution & Trucking, Ford Blue.

Are Ford Stocks a Good Buy for 2022?

Now might not be a good time to buy Ford stock. Ford has faced challenges in 2022. Its stock has lost 27.6% so far this year. Even Wall Street analysts prefer to stay on the sidelines.

At TipRanks, F shares have a consensus Hold rating. It is based on four Buy, ten Hold, and one Sell ratings over the past three months. Ford’s estimated average price of $15.56 implies that the stock is almost fully valued at current levels.

In contrast, hedge funds are very optimistic about Ford and have pumped a strong dollar into the stock. The TipRanks Hedge Fund Trading Activity Tool shows that confidence in Ford is currently Very Positive, as 16 hedge funds increased their cumulative holdings of F shares by 2.1 million shares in the last quarter.

Additionally, Ford pays a quarterly general cash dividend of $0.15 per share, representing an impressive current yield of 2.97%. This may be one of the reasons to hold on to the stock.

Despite supply chain disruptions and logistics issues, Ford has managed to outperform expectations in five of the six quarters since 2021.

For the third quarter of Fiscal 2022, Street expects Ford to post adjusted earnings of $0.52 per share, just one cent higher than the year-earlier comparative figure. Meanwhile, revenue was pegged at $37.57 billion, representing a year-on-year growth of 5.3%.

General Motors Push to EV Manufacturing

in accordance WSJ reports, GM is offering to buy Buick dealers who don’t want to fully invest in selling EVs by 2030. This is GM’s latest attempt to push ahead with its EV plans and revamp its sales network.

Buick has approximately 2,000 franchised dealers in the US who will be given a purchase option. However, the terms of purchase and the amount remain confidential.

GM is also investing heavily in Ultium Cells factories in three locations, and a fourth location will be announced soon. The plant in Ohio is expected to start operating this month, followed by Tennessee and Michigan from 2023 and 2024, respectively.

GM Returns Dividends & Shares Buyback

GM impressed shareholders by reinstating dividend payments and share buybacks, which were suspended in April 2020 due to the disruption of the pandemic. On August 19, GM’s board decided to return a quarterly cash general dividend of $0.09 per share that would be paid first on September 15. This represents the current dividend yield of 0.23%. In addition, the company also increased its share buyback program to $5 billion.

Delighted with GM’s progress and turnaround, CFO Paul Jacobson said, “GM’s consistently strong earnings, margins and cash flow, our balance sheet investment levels, and the achievement of several key milestones in our growth strategy allow us to invest aggressively to accelerate growth. we. an all-electric future while also supporting the return of excess free cash flow to shareholders, in line with our long-term capital allocation strategy.”

What is the GM Stock Prediction?

Wall Street analysts remain cautiously optimistic about General Motors. On TipRanks, GM stock has a Buy Medium consensus rating. It is based on ten Buy, four Hold, and one Sell ratings over the past three months. The General Motors stock forecast average of $47.87 implies a potential 19.3% rise to current levels. Meanwhile, the stock has lost 34.3% so far this year.

Furthermore, the TipRanks Hedge Fund Trading Activity tool shows that confidence in General Motors is currently Very Negative, as the 26 hedge funds decreased GM’s cumulative stock holdings by 9 million shares in the last quarter.

On the revenue side, General Motors has consistently beat expectations except in the last quarter. For Q3FY22, Street expects GM to post adjusted earnings of $1.97 per share, significantly higher than the previous year’s comparative figure of $1.52 per share. Meanwhile, revenue was pegged at $41.62 billion, representing a huge year-over-year jump of 55.4% and sequential growth of 16.4%.

Ending Thoughts

Both Ford and General Motors are investing heavily in the EV landscape, including battery manufacturing and car electrification. However, given the analyst ratings and hedge fund tendencies, Ford seems to be the current favorite between the two. General Motors appears to be slightly behind Ford in terms of successful EV launches and financial stability. Nonetheless, both companies’ EV targets are years away, and only time will tell which auto giant will emerge as the long-term winner.


Leave a Comment