GM Stock Up Today After Citi Price Target Raise

GM stock is higher after Citi's price target increase to $50 from $49, while maintaining a 'buy' rating.
By Krysta Michaelides ,

NEW YORK (TheStreet) -- General Motors Co. (GM) - Get Report stock is up 0.03% to $37.67 in midday trading Tuesday after Citi's price target increase to $50 from $49, while maintaining a "buy" rating.

"We reiterate our view that General Motors shares will trade at premium to Ford (F) - Get Report by the end of 2015," Citi said. 

General Motors out-executed Ford last year in beating its original core EBIT guidance in the face of macro choppiness, analysts said.

In addition, analysts believe General Motors is better positioned for the 2015 "arm wrestle" thanks to their greater exposure to truck segments and lesser regional yen exposure versus Ford.

"General Motor's aggressive capex and restructuring spend should now turn into positives," Citi noted, adding that the two should give investors better appreciation for visbility for a robust 2016-2017 product cycle anchored by easier year over year comps and General Motor's lead in key innovations including OnStar/LTE, and autonomous apps.

Citi believes that General Motor's will report earnings of $4.64, up from prior estimates of $4.60.

Management also clearly left more room for further cash deployment in 2016, analysts noted. 

Separately, TheStreet Ratings team rates GENERAL MOTORS CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate GENERAL MOTORS CO (GM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 91.0% when compared to the same quarter one year prior, rising from $1,040.00 million to $1,987.00 million.
  • Net operating cash flow has slightly increased to $3,164.00 million or 3.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.72%.
  • GENERAL MOTORS CO has improved earnings per share by 15.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL MOTORS CO reported lower earnings of $1.64 versus $2.35 in the prior year. This year, the market expects an improvement in earnings ($4.46 versus $1.64).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.1%. Since the same quarter one year prior, revenues slightly dropped by 2.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for GENERAL MOTORS CO is rather low; currently it is at 16.84%. Regardless of GM's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.01% trails the industry average.
  • You can view the full analysis from the report here: GM Ratings Report
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