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GM stock at new high as analysts say 'buy'

December 28, 2010 | 11:35 am

General Motors Co.’s shares are getting a boost Tuesday as major Wall Street brokerages issue their first reports on the company since its initial public offering Nov. 17, after a mandated 40-day “quiet” period.

Not surprisingly, the brokerages that led the IPO for the automaker mostly still think it’s a great buy.

The stock was up 91 cents, or 2.6%, to a new post-IPO high of $35.51 at about 11:30 a.m. PST. The shares were priced at $33 in the IPO and mostly have traded between $33 and $34.50 since then.

Gmlogo Analysts at JPMorgan Chase, Citigroup, Morgan Stanley, Barclays Capital and RBC Capital all have the equivalent of  “buy” ratings on GM and 12-month price targets of more than $40 for the shares.

RBC analyst Seth Weber rated the stock “outperform,” saying that North American vehicle demand in general was in the “early stages of a multi-year cycle” and that GM would ride that upward trend. He put a price target of $42 on the shares, about 18% above the current market price.

Himanshu Patel at JPMorgan put an “overweight” rating on the stock, saying that the “desirability of GM’s new vehicles seems noticeably improved.” His price target: $44.

For a quick roundup of the research reports, see Matt Phillips’ post on the MarketBeat blog.

Analysts’ mean earnings estimate for GM in 2011 is $3.97 a share, which would be a 38% increase from the $2.87 a share the company is expected to earn this year.

GM still is majority-owned by the U.S. Treasury, the Canadian government and the United Auto Workers, which provided massive financial support for the company after it filed for bankruptcy protection in 2009.

Those creditors sold a chunk of their shares in GM’s IPO, but have many more shares to sell before the company is fully returned to private ownership.

So if Wall Street can keep GM’s stock elevated, all the better for U.S. taxpayers.

-- Tom Petruno