UPDATE: Tudor Pickering Starts General Motors (GM) at Buy, 'Firing on All Cylinders'
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Tudor Pickering analyst Matt Portillo initiates coverage on General Motors (NYSE: GM) with a Buy rating and a price target of $76.00.
The analyst comments "We believe the company is well positioned to lean into the industry’s transition towards electrification at an attractive valuation while bolstering equity upside through technological innovation on both the connectivity and autonomy front. Our work suggests that GM’s shift in its business model over the last three years has positioned the company to outperform as management is charging ahead on electrification, while vertically integrating battery technology and taking a leading position in autonomy. Further, the combination of legacy restructuring, a fleet refresh and new product offerings should help drive margin expansion as the auto market recovers while our forecasted acceleration in EV adoption globally and battery cost reduction will help bring those product lines on par from a profitability standpoint over the medium term. We forecast corporate adj. EBIT to expand materially over the next few years increasing from $10.8B in 2021 (top end of $10-11B guidance) to $13.5B by 2023. Additionally, with an improved outlook on automotive FCF, we expect the company will reinstate its dividend next year with a 38c/sh quarterly payout representing a run-rate annual yield of 2.7%."
Shares of General Motors closed at $56.04 yesterday.
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