JP Morgan: GM Well Positioned For Benefits

JP Morgan has published a research report on General Motors GM and has initiated coverage on the company with an Overweight rating. In the report, JP Morgan writes "We believe the stock offers considerable medium term product opportunity, a sound balance sheet that will delever significantly further by 2013, and high exposure to the fastest growing auto regions, balanced by still evident product/brand weaknesses in NA/Europe, an untested management, and only a few quarters of clean financials. With an ability to generate solid cash flow today despite these challenges and a near trough US SAAR, we think GM can meet these challenges and drive equity appreciation with a multi-year earnings ramp and the resultant continual delivering. Our Dec-2011 price target assumes a 4.25x EV/EBITDA multiple to our 2012 forecast, a 0.75x discount to the 5.0x we consider normalized for US auto stocks." JP Morgan has also issued a $44 price target on General Motors, which closed yesterday at $36.40.