UPDATE: Citigroup Reiterates Buy Rating, Raises PT on General Motors Company
In a report published Wednesday, Citigroup reiterated its Buy rating on General Motors Company (NYSE: GM), and slightly raised its price target from $34.00 to $35.00.
Citigroup noted, “We rate GM shares Buy/High Risk (1H). GM fits well within our auto stock selection framework and bullish sector view, which is anchored by our sector ‘re-birth' theme and positive outlook for global demand. Unlike the auto supplier stocks, OEM investing requires forming conviction on that specific OEM's ability to outperform by way of profitable market share gains and superior regional exposure. We believe GM offers both at a low valuation. In particular, the North America product cycle and brand revitalization stories appear underappreciated based on our proprietary survey work, recent dealer checks and detailed product cycle analysis. We estimate that GM's 2012-14 product cycle may yield $3-4 billion in net pricing benefits. History suggests that OEM stocks are best owned heading into their product cycles, and we expect GM's upcoming cycle to prove no different. Combined with favorable industry dynamics (SAAR recovery, renewed price discipline, transition to global platforms) and GM's #1 presence in emerging markets, GM may be the most compelling 1-3 year auto turnaround story in our universe.”
General Motors Company closed on Tuesday at $25.49.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.