General Motors (GM) is set to report Q3 results before the open tomorrow. The conference call is scheduled for 9am ET.
Capital IQ Consensus estimates are Q3 EPS of $1.11 vs. $1.72 3Q16 and revs of $29.93 bln vs. $42.8 bln in 3Q16.
GM usually guides on call.
It seems investors are beginning to realize that the future profits from changing technologies, may be shared rather than wholly consumed by Musk (TSLA) and the boys in California. Though the rhetorics are changing, it is still obvious that the prospects at Tesla are keeping valuations on traditional manufacturers low.
Several sell side research reports have recently praised GM for its innovation towards electric vehicles (EV), autonomous vehicles (AV), and the technology to go along with it. This technology has been both internally generated and brought in through acquisitions and partnerships.
Valuation is the story here. Good multiple, high dividend yield, and strong cash flow in an "overvalued" market.
General Motors also happens to have some share price momentum on its side and is investing heavily to capitalize on trends surrounding evolving technologies.
Based on GM options, the current implied volatility stands at ~ 23%, which is 19% higher than historical volatility (over the past 30 days). Based on the weekly GM Oct27 $46 straddle, the options market is currently pricing in a move of ~3% in either direction by weekly expiration (Friday).
- Upgraded to Overweight from Equal Weight at Barclays (10-13-2017)
- RBC raised their GM tgt to $44 from $38.
- Upgraded to Buy from Neutral at BofA/Merrill (10/03/2017)
Technically, GM has started to out-perform the broader market during the last two months as it embarked on a +30% uptrend since late-August. The move has it breaking out to a fresh multi-year high above the $40-mark.
Sellers want to see control under the $44-level to create selling pressure. Look for the 50-day around the $40-vicinity as first support in that case.