Analysts are confident that GM’s redesigned full-size pickups will help company’s shares continue to increase after they already surpassed their IPO price for the first time since 2011.
As the US Treasury plans to sell all its GM shares by March 2014, the automaker is more confident that it will soon return to the Standard & Poor’s 500 Index. GM also plans to introduce this year 20 new models in the US, among which the GMC Sierra pickups and the Chevrolet Silverado.
“The product is a lot better than it used to be,” David Whiston, an equity analyst at Morningstar Inc. (MORN) in Chicago, said last week in a telephone interview. “I see a lot of reasons to be bullish on GM right now.”
On May 17th, GM increased 3.2% to $33.42 in New York, more than the $33 IPO price, and fourteen analysts believe that the price will surpass $33 this year, while twenty analysts predict a price of around $37.10. The automaker’s revival has also drawn the attention of investors such as David Einhorn’s Greenlight Capital and Warren Buffett’s Berkshire Hathaway.
During the first quarter of 2012 Berkshire bought 10 million GM shares and by the fourth quarter the company had 25 million shares. Greenlight owns 21.2 million shares. GM CEO Dan Akerson plans to increase the operating profit in North America to 10% and boost China sales to 5 million units from 2.84 million units in 2012.