Wall Street Analyst Upgrades GM Stock

Turmoil continues for GM workers at plants expected to shut their doors, but the stock market seems to be liking the planned cuts. BMO Capital Markets has upgraded the company from “market perform” to “outperform” earlier this week.

BMO Analyst Richard Carlson put two factors behind the change. Cruise Automation, and the opportunity that presents, and the ongoing restructuring that GM is in the middle of.

“We expect a brighter spotlight to be placed on GM Cruise in 2019, leading to a more appropriate value for this business being priced into the shares,” said the analyst. “We believe restructuring efforts will drive better profitability… as well as improve cyclical resilience”, he added.

Cruise is GM’s autonomous driving division. GM acquired the company in 2016, helping give it a big leap forward when it came to the self-driving tech. GM has recently announced that company president Dan Ammann would be taking over as CEO of Cruise. Cruise is expecting to launch a self-driving taxi service in the near future.

November’s plans to slash 14,000 jobs and five plants are expected to cut costs and improve margins for the company, again boosting Wall Street appeal.

Carlson also raised his target price for the stock to $41/share from $38. GM closed the day yesterday at $34.81 per share.

Comments