#The Ratings Game: GM stock jumps after Wedbush analyst calls it a ‘disruptive technology play’
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“#The Ratings Game: GM stock jumps after Wedbush analyst calls it a ‘disruptive technology play’”
Analyst Dan Ives initiates GM at outperform, saying 2021 is an ‘inflection point’ as the automaker drives toward an electric future
Shares of General Motors Co. rallied Friday, putting them on track to snap a five-day losing streak, after a bullish call from Wedbush analyst Dan Ives, who said the automaker is now a “disruptive technology play” given Chief Executive Mary Barra’s “laser focus” on electric vehicles.
Ives initiated coverage of GM with an outperform rating and $85 stock price target, which implies a 52% gain from Thursday’s closing price of $56.06. That makes Ives the second-most bullish of the 23 Wall Street analysts surveyed by FactSet, behind only Wolfe Research’s Rod Lache who has an $86 price target.
GM,
rose 3.6% in premarket trading Friday, after falling 5.3% over the past five trading sessions to close Thursday at a seven-week low.
20 of 23 analysts who cover GM are bullish
FactSet
With at least 20 new EV models coming out in the next two years, and 30 EV models in the next three years, Ives said “2021 serves as an inflection point” for GM, as they completely shift their focus toward an electric future.
“Going forward, GM continues to be a re-rating story as the Street treats the Detroit automaker no longer as a traditional auto company trading based on book value, but a broader disruptive technology play that can start to trade at multiples similar to the likes of Tesla and other pure-play electric vehicle companies as GM executes on its vision,” Ives wrote in a note to clients.
GM’s stock has climbed 34.6% year to date and run up 139.4% over the past 12 months through Thursday, to outperform Tesla Inc.’s stock, which has lost 7.5% this year and advanced 134.1% over the past year. In comparison, the S&P 500 index
SPX,
has advanced 15.0% year to date and climbed 37.1% over the past 12 months.
FactSet, MarketWatch
Ives said that with GM developing “game-changing” battery technology under the Ultium Platform, the company is also in a “great position” to take advantage of an emerging $5 trillion battery market over the next decade.
“By leveraging this technology, the legacy auto will be able to eat up market share against pure-play EVs in all aspects of the industry,” Ives wrote.
But that’s not all. Ives said GM’s software and services business attached to the EV shift, as autonomous and assisted driving capabilities and battery technology improves, represents “a potential gold mine” that could bring in $20 billon to $30 billion over the next five to seven years.
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