Mizuho Securities Sees Multiple Catalysts for GM Stock, Gives It an Upgrade

Takeaways

Mizuho Securities upgraded General Motors stock on Sunday and raised its price target after noting several growth catalysts.
Mizuho analysts said they believed the automaker's cost cutting would help offset rising labor costs following the company's recent six-week strike. UAW against GM and other automakers.
Mizuho also pointed to a rollback of GM's electric vehicle (EV) and autonomous vehicle plans, as well as a new program of share buybacks in its research note. about the company.

Shares of General Motors Co. (GM) gained ground Monday after Mizuho Securities upgraded the stock and raised its price target based on several catalysts that the company believes are boosting GM's value.

Analysts raised the rating from GM to 'buy' from "neutral," and increased its price target from $38 to $42. As of Monday evening, GM shares were trading around $33, up more than 2% since Friday's close.

The bank noted that the six-week strike of the United Auto Workers (UAW) was now “in the rearview mirror” and production had resumed at GM. He argued that the UAW's expected costs of $1.5 billion in increased wages next year will be offset by about $2 billion in fixed cost reductions.

Analysts also highlighted the automaker's revised plans automotive aimed at manufacturing more cost-effective electric vehicles (EVs). Additionally, they appreciated the pause in the loss-making Cruise autonomous vehicle program and the $10 billion GM stock buyback announced last week.

Mizuho said the key to success For GM , it is its “strong and broad portfolio focused on SUV/pick-up” that constitutes its strength in the United States and North America. He estimates that 85% of the company's vehicle portfolio is gasoline and diesel SUVs and pickup trucks, and that GM had a “strong” market share of 60% in the United States for large SUVs and 46%. % for small SUVs.

After reaching more than three -year lows early last month, GM shares have rebounded but remain down for 2023.