GM Analyst: Why Detroit Automaker's EV Opportunity Makes Stock 'Undervalued'

General Motors Company GM is holding a two-day analyst day with a focus on the electrification opportunity that is underway. GM said its revenues would likely double by 2030.

The General Motors Analyst: RBC Capital Markets Joseph Spak reiterated an Outperform rating and $74 price target for GM shares, suggesting roughly 37% upside from current levels.

The General Motors Takeaways: General Motors has backed up the long-term opportunity with sizable long-term targets, Spak said in a Thursday note. The company has a lot of shots on goal as the industry and the company transform, he added.

Some opportunities may materialize, others may fail and still others could be larger than anticipated, the analyst said.

"But, GM likely doesn't need all these opps to exactly play out as it indicated for stock to be undervalued here."  

Related Link: GM-partnered SAIC Outsells Tesla And Nio In China With Its $4,500 Mini EV

For the stock to get going and incremental investors to be interested, the company should show growth, and ESG investors should take a look at GM, Spak said. 

GM now has multiple growth platforms, the analyst said. The company showed several EV models such as e-Equinox/Blazer equivalents priced at $30,000 as part of its EV portfolio that will boast 30 models by 2025, he said. 

"Product helps GM grow its auto sales and financing biz at a 4–6% CAGR through 2030 to $195–235bn with $90bn BEV," Spak said.

The company expects to grow software/new business from $2 billion today to $80 billion in 2030, which consists of $50 billion from Cruise, $10 billion from  Brightdrop and about $16.5 billion from software and services, among others, the analyst said. 

A Cruise spin/IPO is unlikely to occur anytime soon, the analyst said. Cruise, however, is showing clearer signs of moving toward commercialization, he said. 

GM Price Action: GM shares were trading 4.73% higher at $56.48 midday Thursday. 

Related Link: GM Announces New EV Battery Center Investment To Expand Battery Ambitions