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Investing.com -- Benchmark initiated coverage on General Motors (NYSE:GM) with a Buy rating and a $65 price target, citing what it calls “underappreciated upside potential” in a durable and cash-generative U.S. industrial franchise.
In a note to clients, Benchmark analysts said GM’s “core business remains resilient,” pointing to strong free cash flow generation, disciplined capital allocation, and growing market share.
The firm believes the automaker is executing effectively on its transformation roadmap while maintaining a “balanced approach to growth and shareholder returns.”
Benchmark highlighted GM’s electric vehicle strategy as notably more measured than peers.
“Rather than pursuing scale at any cost,” the analysts wrote, “the company is focused on aligning EV production with consumer demand to protect brand equity and avoid margin dilution.”
EV volumes rose 94% year-over-year in the first quarter, securing GM the No. 2 position in the U.S. EV market, with nearly half of its EV models generating variable profits.
GM’s $24 billion cash balance and guided 2025 automotive free cash flow of $7.5 billion to $10 billion reinforce its financial strength, according to Benchmark.
They added that more than two-thirds of the company’s capital expenditures are directed toward U.S.-based projects, aligning with current domestic policy incentives.
Despite near-term uncertainty around tariffs and macro conditions, Benchmark said GM’s strategic positioning, expanding software capabilities, and operational efficiency offer “defensibility and upside optionality.”
“Our $65 price target is based on a 2026 P/E of 5.8x based on diluted EPS of $11.22,” the analysts wrote. They concluded that GM remains “mispriced relative to its long-term value creation potential.”