Analyst Sees Possible 'Big Bang' Of Upside For General Motors

There’s a lot of Street uncertainty surrounding the relative position of General Motors Company GM.

While analysts mostly agree the automaker merits Buy or Hold ratings, there is no consensus on the firm’s place in the autonomous vehicle and fleet race. Some expect further clarity during Thursday’s future-focused investor webcast.

The Rating

Bank of America Merrill Lynch analyst John Murphy maintains a Buy rating on GM with a $57 price target.

The Thesis

Merrill Lynch expects Thursday’s disclosure of future technology and related financial strategies to catalyze a stock run.

Updates on General Motors’ Cruise Anywhere ride-hailing service, with integration of electric and autonomous vehicles, could prove the firm’s leadership in the EV-AV space and its “unique competitive first mover position” among fleet operators, Murphy said. (See Murphy's track record here.) 

“In addition, we also expect GM may provide financials/estimates for its ‘future tech’ operations and/or outline its strategy to realize value for its assets now, including potential ring-fencing of the business and offering of a stake,” Murphy said in a Tuesday note. 

The analyst said he expects little discussion of GM’s core business and 2017 finances, but said GM “continues to execute very well.”

Price Action

General Motors spiked 1 percent Tuesday morning and traded at $44.46 at the time of publication.

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A Chevrolet Bolt autonomous test vehicle. Photo by Dustin Blitchok.