General Motors shares gain for a third straight session on Tuesday, Wells Fargo initiates coverage on stock with “Overweight” rating, $67 price target

Wells Fargo has initiated coverage on General Motors Co (GM) with an ”Overweight” rating, as it said the US auto maker was well positioned for the electrification of the automobile industry.

The Wall Street bank also assigned a 12-month price target of $67, which is based off a 4 times multiple of 2022 core EBITDA of $13.7 billion.

“GM is leading the way in the autonomous, electric, and connected future of mobility. GM’s autonomous unit Cruise was recently valued at $30bn, in line with perceived leader Waymo,” Wells Fargo analyst Colin Langan wrote in a note to clients.

“GM plans to roll out the 3rd generation of EV vehicles using its Ultium EV battery technology on exciting products like the new Hummer and Cadillac Lyric. And Super Cruise, GM’s L2 automated driving technology, recently bested Tesla’s AutoPilot in Consumer Reports. While restructuring work still needs to be done internationally, GM’s North American operations are strong, reporting a 9.4% adj EBIT margin in 2020, an incredible performance in a market down 20%. This has enabled GM to explore new market opportunities like delivery (Brightdrop) and fuel cell (Navistar partnership),” Langan noted.

General Motors shares closed higher for a third consecutive trading session in New York on Tuesday. The stock went up 1.47% ($0.90) to $61.94, after touching an intraday high at $63.42 and also a fresh all-time high.

Shares of General Motors Company have risen 48.75% so far in 2021 compared with an 8.46% gain for the benchmark index, S&P 500 (SPX).

In 2020, General Motors’ stock went up 13.77%, thus, it underperformed the S&P 500, which registered a 16.26% gain.

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