General Motors shares gain for a third straight session on Wednesday, auto maker announces tie-up with Michelin on new type of wheel

June 6, 2019 9:17 am

At a news conference in Montreal earlier this week, General Motors Company (GM) revealed a new partnership with French tire manufacturer Michelin, focused on developing a radical new type of wheel, which is to replace the conventional pneumatic tires.

General Motors shares closed higher for a third consecutive trading session in New York on Wednesday. The stock went up 0.31% ($0.11) to $35.84, after touching an intraday high at $36.14, or a price level not seen since May 22nd ($37.05).

Shares of General Motors Company have risen 7.14% so far in 2019 compared with a 12.74% gain for the benchmark index, S&P 500 (SPX).

In 2018, General Motors’ stock went down 18.39%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.

For the past several years Michelin has been engaged in the development of an airless tire concept, known as the tweel, while it intends to mass produce it under the brand name Uptis.

According to Steve Kiefer, GM’s Vice President, Global Purchasing and Supply Chain, the tweel could go into mass production by the year 2024.

In the current prototype, Uptis has the appearance of a skeletal form of a conventional tire. It is comprised of three separate components, beginning with an outer layer, which represents a mixture of rubber and synthetic compounds. This new airless tire cannot be inflated, cannot go flat and also cannot be blown out, which is meant to add to highway safety.

GM’s Kiefer said that industry data had shown one in five conventional tires could lose air pressure at some point each year.

According to Eric Vinesse, Michelin’s head of research and development, the Uptis will be as fuel efficient as a conventional tire, while it will cost less and have a longer lifespan.

According to CNN Money, the 17 analysts, offering 12-month forecasts regarding General Motors Company’s stock price, have a median target of $48.00, with a high estimate of $67.00 and a low estimate of $35.00. The median estimate represents a 35.36% upside compared to the closing price of $35.46 on June 5th.

The same media also reported that 12 out of 20 surveyed investment analysts had rated General Motors Company’s stock as “Buy”, while 6 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for General Motors Company (GM) are presented as follows:

Central Pivot Point – $33.94
R1 – $34.74
R2 – $36.13
R3 – $36.93
R4 – $37.72

S1 – $32.55
S2 – $31.75
S3 – $30.36
S4 – $28.96

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