Nikola Stock – Capital Calls: GM is a wannabe speedy that is stuck in slow lane
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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VROOM-DOOM. General Motors boss Mary Barra has much to be proud of. The $80 billion carmaker’s $3 billion first-quarter net profit here blew past estimates. Unlike Ford Motor, it reiterated its 2021 earnings guidance despite a disruptive chip shortage. And its 12-month 155% share price increase bests traditional rivals.
GM now trades at a higher multiple of the next 12 months’ estimated earnings than Ford and usual leader Toyota Motor. Yet a valuation of 10 times earnings implies investors expect no growth. True, Stellantis reckons the chip crisis could last into 2022, longer than Ford and GM expect. But it must irk Barra that shareholders refuse to ascribe the same sort of value to GM’s electric and autonomous tech that new entrants enjoy. Scandal-hit Nikola’s enterprise value trades at 34 times the next 12 months’ sales; GM’s is a measly 0.5 times. That leaves Barra stuck squarely in the slow lane. (By Antony Currie)
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Earlier in Capital Calls:
Stellantis maiden voyage enters stormier waters
Nestlé plant-based push is pea in Danone’s shoe
UK bank suffers unfamiliar altitude sickness
Aussie bank’s green coal-port loan burns lukewarm
China’s $5 bln jobs buyout ekes past first round
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