Deutsche Bank Reiterates Buy Rating, $31 PT on General Motors Company

In a report published Friday, Deutsche Bank reiterated its Buy rating and $31.00 price target on General Motors Company

. Deutsche Bank noted, “We viewed GM's decision to acquire captive financing operations for their Latin American, European, and China operations as a significant positive. This announcement, and the $4 bn acquisition price were in-line with expectations. And as we expected the acquisition is not expected to require a massive amount of cash from GM. GM will contribute $2 bn of additional equity capital to GMF to support the acquisition, and additional growth plans (we've noted that that GMF was only 2.2x levered as of Q3, compared with 8x for Ford Credit, and that this acquisition could be accomplished largely through increases to GMF's leverage). Moreover, since the acquisition is not expected to close until mid-2013, we believe that GM will still have at least $32 bn of cash + an $11 bn revolver available for other purposes. We believe that this, and other recent developments significantly increase the probability that GM will seek to buy back a large portion of the US Treasury's stake in the company. We would expect any such development, and other subsequent moves to return cash to shareholders, to be viewed positively by the Street.” General Motors Company closed on Wednesday at $24.60.