Author: Michael Juliano

General Motors Company (NYSE:GM) plans to restructure its joint venture with SAIC General Motors Corporation after losing $210 million in this year’s first half, but an analyst thinks the automotive giant shouldn’t even bother.

“We note that GM announced plans to restructure its operations in China,” Bank of America analyst John Murphy said in a note.

“We are concerned the pressure in China is more structural than transitory due to excess capacity and continue to believe GM should exit the market.”

Also Read: GM Reports $210M Loss In China Joint Venture: ‘The Headwinds Are Not Easy’

Murphy also said that China “remains a material drag on relatively good performance in other regions” of the world where GM is having better sales as it invests in developing electric vehicles (EVs) and autonomous vehicles (AVs).

Bank of America reiterated a Buy rating and maintained a price target of $85 on GM, which beat revenue estimates for the second quarter.

“Our Buy rating on GM is predicated on our view that the company remains a leader among the industry in its Core to Future transition,” Murphy wrote.

“More specifically, GM’s ongoing execution and strength in its Core business continues to enable the company to step up its investments across EVs and AVs, further Future-proofing the business.”

Goldman Sachs maintained a Buy rating that it has had on GM since July 2020, pointing out that the company is launching eight new or redesigned sports-utility vehicles in North America in this year’s second half.

“Moreover, GM continues to focus on cost and said it remains on track to achieve its net $2 bn cost reduction plan by the end of the year,” Goldman Sachs analyst Mark Delaney wrote.

Murphy noted that GM’s total company revenue of $48 billion for the second quarter was up about 12% from the first quarter and up about 7% from a year ago, beating Goldman Sachs’ estimate of $44.5 billion and Wall Street consensus of $45.1 billion.

Price Action: GM declined 4.82% to $44.25 as of Thursday’s mid-morning trading, while exchange-traded funds that track the company showed gains and losses.

• First Trust Nasdaq Transportation ETF (NASDAQ:FTXR) declined 0.63%
• Invesco S&P 500 Pure Value ETF (NYSE:RPV) inched up 0.01%.
• IShares U.S. Manufacturing ETF (NYSE:MADE) slipped 0.29%.
• IShares MSCI USA Value Factor ETF (VLUE) gained 0.28%.
• Brandywine Global – Dynamic US Large Cap Value ETF (NASDAQ:DVAL) went up 0.26%.

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• General Motors Well Positioned To Sustain Strong Margins – Analysts Raise Forecasts

Spotify Technology (NYSE:SPOT) has a new, more expensive premium plan for music lovers.

What Happened: According to Bloomberg, subscribers would pay at least $5 more monthly for the plan.

The new offering, set for later this year, features access to improved audio. It also offers new capabilities for making playlists and managing song libraries.

Spotify did not immediately respond to Benzinga’s request for comment.

Spotify expects to offer the upgraded plan as an add-on for existing customers. That means most users will stay on their current Spotify plans while those who buy the upgrade will create more revenue for the company and its partners.

Also read: Decoding Spotify Technology’s Options Activity: What’s the Big Picture?

Why It Matters: Spotify is just the latest streaming company to raise prices, seemingly justifying the decision by offering more to its customers.

Other content providers — Netflix (NASDAQ:NFLX), Warner Bros Discovery‘s (NASDAQ:WBD) Max, and Comcast Corp‘s (NASDAQ:CMCSA) Peacock — are all raising prices.

The premium plan could generate hundreds of millions of dollars in additional revenue. That money would go toward music rights holders.

Pricing will vary based on users’ base plans. It will result in a roughly 40% higher cost for the feature — dubbed a “Supremium” plan.

Tactics like these have been discussed for years. Companies see higher-quality audio as an opportunity to upsell and/or implement tier pricing. Competitors like Amazon Music and Apple Music have already started offering improved audio as part of their standard plans.

Last week, Spotify adjusted the cost of its monthly individual plan to $11.99 from $10.99. The duo plan went from $14.99 to $16.99. The family plan went from $16.99 to $19.99 in the U.S.

Price action: Spotify’s shares have declined 0.9% to $312.18 in early-morning trading on Tuesday.

Read Now: Spotify Stock Is Surging Today: Here’s Why

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