General Motors (GM) Stock Fair Value at $81: MorningStar Research
General Motors (NYSE: GM) has emerged as a compelling investment opportunity, with Morningstar assigning a fair value estimate of $81 per share, significantly higher than its last traded price of $47.11. This valuation suggests a substantial upside potential of over 70% for investors. The report highlights GM’s competitive lineup, cost optimization strategies, and a growing electric vehicle (EV) portfolio, which are expected to drive long-term earnings. However, uncertainties surrounding global tariffs, slowing EV demand in North America, and rising competition remain key risks. Investors should weigh these factors while considering their exposure to the stock.
Current Market Performance and Valuation
Last Closing Price: $47.11 (as of March 13, 2025)
Fair Value Estimate: $81.00 (Morningstar’s projection)
Price/Fair Value Ratio: 0.58, indicating the stock is currently undervalued
Market Capitalization: $48.32 billion
P/E Ratio: 4.44, considerably lower than sector peers
Dividend Yield: 1.02%
The stock’s price-to-earnings (P/E) ratio remains low, suggesting it may be undervalued compared to its growth potential. A P/E of 4.44 signals that GM is trading at a significant discount relative to its earnings.
General Motors' Strategic Growth Plans
Revenue Expansion: GM targets $250 billion in total revenue by 2030, driven by high-margin businesses such as subscriptions, data monetization, and insurance.
Cost Reductions: The company has cut $2 billion in expenses from 2023-24, significantly lowering its break-even point.
Electric Vehicle (EV) Investments: GM is investing $35 billion in EVs and autonomous vehicles (AVs) between 2020-2025.
Autonomous Vehicle Strategy: GM has restructured its Cruise division, merging it with Super Cruise for personal AV development.
These initiatives are aimed at enhancing profitability, reducing dependence on traditional auto sales, and improving operating margins over the long term.
Electric Vehicle Market: A Double-Edged Sword
EV sales stalled in North America and Europe in 2024, but global adoption remains on the rise.
EV penetration is projected to reach 33% by 2030, compared to just 14% in 2024.
Lithium prices, crucial for EV battery production, are expected to double by 2026.
GM’s success in the EV space depends on expanding its lineup, improving cost efficiencies, and competing effectively with established players like Tesla (NASDAQ: TSLA) and BYD (OTC: BYDDY).
Technical Analysis: Key Levels for GM Stock
Candlestick Pattern Analysis
GM’s recent price action suggests a potential breakout, with bullish momentum forming above its 21-day moving average.
A strong support level exists around $45, with resistance near $50-$52.
The Relative Strength Index (RSI) at 58 indicates moderate bullish strength, suggesting room for further upside.
Fibonacci Retracement Levels
| Stock | 52-Week High | 52-Week Low | 0% (Low) | 23.6% | 38.2% | 50% | 61.8% | 78.6% | 100% (High) |
|---|---|---|---|---|---|---|---|---|---|
| General Motors (GM) | $81.00 | $47.11 | $47.11 | $55.40 | $60.29 | $64.05 | $67.80 | $72.78 | $81.00 |
| Ford Motor Co (NYSE: F) | $16.00 | $9.53 | $9.53 | $11.07 | $12.14 | $12.77 | $13.40 | $14.32 | $16.00 |
| Mercedes-Benz Group AG (MBG) | $106.00 | $59.72 | $59.72 | $71.12 | $78.02 | $82.86 | $87.70 | $94.13 | $106.00 |
| BMW (Bayerische Motoren Werke AG) | $117.00 | $82.32 | $82.32 | $91.73 | $97.35 | $99.66 | $105.99 | $111.42 | $117.00 |
GM’s stock is trading near the 23.6% Fibonacci retracement, which historically acts as a strong support level.
A break above $52.45 (38.2% retracement) could signal further bullish momentum.
Investment Outlook: Is GM a Buy?
Pros:
Undervalued Stock: GM is trading at a 42% discount to its fair value of $81.
Cost Efficiency: Aggressive cost-cutting measures have lowered the company’s break-even point.
Strong Revenue Growth Potential: GM’s pivot toward high-margin businesses could enhance profitability.
Cons:
EV Market Challenges: The slowing adoption of EVs in the U.S. and Europe may impact near-term growth.
Global Tariff Risks: Rising tariffs on auto imports from Canada and Mexico could affect profit margins.
High Uncertainty: Morningstar classifies GM under “High Uncertainty”, making it susceptible to macroeconomic fluctuations.
