General Motors shares rose Tuesday after banks restarted coverage of the automaker with high marks for its North American sales and position in emerging markets. The positive ratings by Wall Street come just six weeks after GM returned to the New York Stock Exchange in the largest initial public offering in history — about $23.1 billion. Its high was $35.99, reached on its first day of trading Nov. 18.
JPMorgan started its coverage of GM with an "overweight" and set a price target for December 2011 at $44 per share.
Barclays Capital also rated the company "overweight" and set a price target of $42 per share.
Barclays said GM is "relatively attractive" for three reasons — strong positions in emerging markets China and Brazil; strong earnings in North America due to price discipline; and even a conservative estimate of its financial position suggest $42 per share price target.
JPMorgan sees the "potential for significant additional appreciations beyond year-end 2011."
Advantages for GM include "high exposure to the fastest growing auto regions," "a sound balance sheet that will delever significantly further by 2013," and "considerable medium term product opportunity."
The U.S. government bailed out GM for $50 billion after the automaker's 2009 bankruptcy. The Obama administration has said it is on track to recoup the full investment in GM and that it is making progress toward shedding government's stake by mid-to late-2012.
