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Evercore Sees New Value In GM Cruise, Upgrades On SoftBank Investment

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Evercore Sees New Value In GM Cruise, Upgrades On SoftBank Investment

General Motors Company (NYSE: GM) was off to a good start Thursday, with a strong SoftBank investment bolstering the firm’s prospects in autonomous vehicles.

A sell-side upgrade extended the stock’s rally. 

The Rating

Evercore ISI analyst George Galliers upgraded GM from In Line to Outperform and increased the price target from $47 to $50.

The Thesis

Ahead of the SoftBank announcement, Evercore had assigned no value to General Motors’ Cruise assets. But the segment’s new $11.5-billion valuation, coupled with SoftBank’s 19.6-percent stake, merits attention.

The analysts accordingly adjusted their sum-of-the-parts model to reflect an $8-per-share value in GM’s standalone Cruise unit. They also attribute 60 cents to GM’s Lyft stake with a six-times multiple, as opposed an earlier seven-times multiple, on the company’s core business.

With a 25-percent discount to Cruise and Lyft assets, Evercore anticipates a higher price potential.

Price Action

At the time of publication, GM shares were trading up 10.2 percent at $41.69.

Related Links:

BofA: Lyft, Magna Could Be The First Of Many Autonomous Vehicle Partnerships

Study: Tesla The Most Trusted Company In Autonomous Development Race, Despite Crash Investigations

Chevrolet Bolt EV autonomous test vehicles at General Motors Orion Assembly in Orion Township, Michigan. Photo by Jeffrey Sauger/courtesy of General Motors. 

Latest Ratings for GM

DateFirmActionFromTo
Apr 2021Wells FargoInitiates Coverage OnOverweight
Feb 2021CitigroupMaintainsBuy
Feb 2021Morgan StanleyMaintainsOverweight

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View the Latest Analyst Ratings

 

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