GM Shares Deserve A Higher Multiple, Bank Of America Argues In Upgrade Note

General Motors CompanyGMJohn MurphyGeneral Motors' stock rating from Neutral to Buy with a price target boosted from $40 to $57 (see Murphy's track record here). General Motors management time is showing investors it is dedicated to pursuing expansion opportunities at an "accelerated pace" while simultaneously maintaining the "strength" of its core truck and global auto business, Murphy argued in his upgrade note. Specifically, the company's ability to include autonomous electric vehicles into a ride-hailing fleet that is integrated with OnStar gives it a "unique competitive first mover position."

As General Motors develops and commercializes its technology over time, the company will at the very least be able to "defend its current market share in whatever direction the new mobility world morphs into," the analyst said. But the more likely scenario would consist of the company offering a "more valuable mobility product" that will drive shareholder value higher.

At this time, General Motors' vision of its future implies that management now "deserves the benefit of the doubt" and investors should treat the stock accordingly, Murphy said.

"We are acutely aware of the cyclical risks that represent a material overhang and are the biggest impediment to upside in the stock," Murphy concluded. "Nonetheless, we think GM possesses the requisite pieces of the puzzle to capitalize on the opportunities presented by the changing mobility landscape, while leveraging the strength of its core auto business."

At time of publication, shares of GM were up 3.44 percent at $43.60.

Related Links: GM Could Have Difficulty Achieving Its Year-End Inventory Target Is GM Finally Getting The Props It Deserves?