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General Motors Co. is approaching its earnings week very much in Wall Street’s good graces. GM continues to earn praise for selling its European business. It has built excitement ahead of the revamp later this year of some of its key pickup trucks and SUVs. And, at least on the surface, it appears to be ahead of competitors in autonomous cars and electric vehicles, two of the most-watched developments in the auto industry. GM is slated to report fourth-quarter earnings before the bell on Feb. 6. The report comes as Ford Motor Co. and Tesla Inc. have struggled, and as investors remain concerned about falling U.S. car sales.

“We are on the backside of peak auto now,” said David Kudla, Chief Executive of Mainstay Capital Management. GM said it expects 2018 results to roughly align with 2017, so it remains to be seen how the company will pull it off on the expected decreased volumes, he said.

Ford stock remains at multi-month lows after the company’s weak earnings and guidance, and as Wall Street continues to pressure the car maker for more clarity and details about its medium-term plans… …Stock reaction: GM’s stock is up more than 16% in the past 12 months, compared with gains of around 24% for the S&P 500 index and 32% for the Dow Jones Industrial Average. Stock gains contrast with a 10% loss for Ford shares, and compare with gains of 35% for Tesla in the same period… …GM has vowed to launch an autonomous vehicle by 2019, so analysts will welcome any updates on that project, Windau said. GM, which sold more than 20,000 all-electric Chevy Bolts last year, also said it expects to offer 20 new electric vehicles by 2023.

GM executives have done a “very good job” articulating the company’s strategy in mobility, EVs, and driverless cars, Mainstay’s Kudla said. At the same time, the company has a “fortress balance sheet” based on its high margin trucks and SUVs, he said. “We credit Mary Barra with really being able to articulate a clear and focused strategy for the future,” he said. “GM has really been upfront and that has endeared it with Wall Street and given Wall Street a lot of confidence in their vision.”

 

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