NEW YORK (AP) — Shares of General Motors jumped 2.4 percent Tuesday in premarket trading after several investment groups initiated coverage of the reinvigorated automaker.
Credit Suisse set an "Outperform" rating for GM with a 12-month price target of $43 per share, saying that the company's stint under bankruptcy protection cleansed its balance sheet. Analyst Christopher Ceraso said GM has emerged with a $35 billion increase in asset value, mostly through a reassessment of goodwill, intangible assets and equity investments. It also saw a reduction of nearly $93 billion in liabilities.
Ceraso noted, however, that GM's fleet of new models will be limited next year and its pension plans are still under-funded by more than $20 billion.
"We recognize that 2011 will be a difficult year," Ceraso said in a research note. But the company should see more robust growth in 2012 and 2013, he said.
Other investment firms also initiated coverage of GM. J.P. Morgan set an "Overweight" rating for GM with a target price of $44 per share. Citigroup initiated coverage with a "Buy" rating, and RBC Capital Markets set an "Outperform" rating for GM.
Nearly two years ago, GM was rescued with $50 billion from taxpayers to stave off a total collapse. After a major shakeup of its management and board, the company made its initial public offering in November and shares have largely been rising since.
Shares of General Motors Co. rose 84 cents to $35.44 before the market opened.
