J.P. Morgan Reiterates Overweight On General Motors, Increases PT To $46 (GM)

J.P. Morgan reiterated its Overweight rating and increased its price target on General Motors GM from $42 to $46. In a research report published today, J.P. Morgan reaffirmed its view that General Motor's shares are currently undervalued while reducing its earnings per share estimate for 2011. In the report, J.P. Morgan states, "Overweight-rated GM remains a fundamentally cheap stock (2.2x EV/EBITDAP and 6.7x P/E on JPM 2012e earnings), but it is unlikely to work better until near-term concerns around a government stake sale and the economy improve. We tweak down our EPS in 2011e, largely reflecting a more conservative view on mix and commodities despite improved pricing, and in 2012e-2013e largely reflecting now-lower anticipated noncash pension income due to lower anticipated pension contributions. That said, our Dec 2011-end price target (which uses 2012e EBITDAP and 2011e-end balance sheet) is nudged up to $46 (from $42), primarily reflecting stronger 2011-end projected cash balance, aided by robust recent asset sales proceeds and Q1 cash generation." General Motors added 1.12% to its value today and is currently trading at $32.38.