UBS analyst Joseph Spak emphasized that General Motors' digital capabilities are currently undervalued, which could lead to a re-rating of the stock. The investment bank has upgraded its price target for GM shares from $102 to $114, indicating a potential 33% increase from the stock's recent closing price.
Spak noted that GM's digital revenue could reach $9.6 billion by 2036, driven by services such as in-vehicle AI assistants and the subscription-based Super Cruise driver assistance system. He pointed out that as a larger portion of GM's fleet becomes connected, the company can leverage ongoing vehicle ownership and secondary customer opportunities, moving beyond traditional vehicle sales.
This perspective aligns with the broader consensus among analysts, with 22 out of 29 recommending a buy or strong buy for GM stock. Despite a 5% increase in shares year-to-date, GM has underperformed compared to the overall market, and shares remained flat in early trading on Monday amid market fluctuations