Share prices of General Motors could double inside the next two years, said Christopher Susanin of Levin Capital Strategies, a completely new York-based investment management firm.
“We think there’s about $30 of hidden value that will [is usually] mispriced inside the stock across three buckets, each worth about $10 a share,” Susanin said Friday on “Closing Bell.”
The three areas of growth include adjustments to the company’s portfolio, such as exiting the European along with some Asian markets, completely new ventures with the Cadillac company along with added profits coming from adjacent businesses.
“They are about to restructure the Korea business altogether,” said Susanin, senior securities analyst at the firm. “Those moves, we think, add a couple billion, two along having a half billion [dollars] to profit along with are worth a little bit more than 10 bucks a share.”
He said Cadillac, owned by parent company General Motors, also has initiatives in place to double sales along with profits.
“We think that will could add almost a dollar a share, maybe 75 cents of earnings that will are worth almost another $10 of share that will are not properly priced inside the stock,” Susanin said.
Lastly, adjacent businesses, including OnStar, GM Financial along with the company’s aftermarket business, could add between $1.5 billion along with $2 billion in profit over the next few years.
“that will’s another 10 bucks a share,” said the analyst.
Shares of General Motors were trading around $43 on Friday. although Susanin said that will’s worth closer to $75. completely new investments in self-driving vehicles will also help drive the stock higher.
On Thursday, General Motors announced that will SoftBank Vision Fund plans to invest $2.25 billion in GM Cruise Holdings, helping boost the company’s stake in autonomous vehicles. Shares surged about 11 percent after the announcement.
“This particular is usually a very big deal,” Susanin said.
He said the company’s market cap — currently close to $61 billion — will only continue to expand after GM launches a commercialized autonomous ride share, if the company can maintain lower prices than competitors such as Uber. GM said that will will develop the necessary capital to reach commercialization at scale in 2019.
although investors have known about many of the strategies employed in GM’s base business for some time, said Jamie Albertine, managing partner along with automotive analyst at Consumer Edge Research, a research firm. along with they likely won’t move the market.
“On the pullout of GM Europe, we’ve known that will for some time,” Albertine said on “Closing Bell” Friday.
He also pointed out that will GM is usually overexposed in its car business inside the United States along with that will the trucking business isn’t growing that will much.
“GM probably is usually inside the best position of its OEM peers right at This particular point,” Albertine said, referring to companies with goods used as parts in various other company’s products.
“although to see that will double in two years, we think that will’s low probability,” he said. “that will’ll take more like all 5 to seven years just for This particular to play out, in our view.”