After nearly eight years of chugging along at a tepid pace following its post-bankruptcy share offering in November 2010, General Motors Co. (GM) just received a high-octane injec𒈔tion that could give its shares a long-awaited boost. At $2.25 billion, that high-octane investment from SoftBank into GM Cruise Holdings implies an $11.5 billion valuation for the autonomous-vehicle unit of the once beleaguered automaker. SoftBank’s investment is confirming the optimistic views of a number of analystsﷺ including Piper Jaffray’s Alexander Potter who reiterated his Overweight rating and price target of $57 a share, to Barron’s.

Turbo Boosted Price Targets

Since its IPO back in late 2010, shares of the leaner post-bankrupt GM have risen a meager 26%, compared to the more than 130% rise of the S&P 500 over the same period. Year to date, GM is up 5.39%, ahead of the 2.28% increase of the broader market index. Potter’s $57 price target implies an additional 32% rise based on Friday’s closing price of $43.20. (To read more, see: 澳洲幸运5官方开奖结果体彩网:General Motors Stock to Outperform in 2�💜�018: RBC.)

Morgan Stanley analyst Adam Jonas indicated that the $11.5 billion implied valuation of Cruise Holdings is six times higher than what he had been conservatively estimating, giving him reason to change his 澳洲幸运5官方开奖结果体彩网:sum-of-parts valuation for GM to $62 a share from $56. Jonas’ published price target is set at $48 a share, reflecting a significant 澳洲幸运5官方开奖结果体彩网:conglomerate discount, and implies an 11% upside for GM shares. 

Robo-Taxi Rollout

GM is considered one of the leading companies in autonomous-vehicle technology, with Alphabet’s Waymo unit as its primary competitor. The SoftBank deal “demonstrates the stock’s value to a broader set of TMT investors,” wrote Jonas, and🦩 “validates” Potter’s view that GM has major potential in the robo-taxi 🐟business, which is one of the major business opportunities in the autonomous-vehicle technology space, to Barron’s.

In a conference call last week, GM’s CEO Mary Barra claimed that sometime in 2019 the company is planning to rollout a fleet of all-electric autonomous vehicles as part of a ride-sharing network. Potter $1.1 billion of planned investment by GM in its autonomous-vehicle unit as strong support that could see the deployment of 33,000 ride-sharing vehicles bringing in close to $3 billion in annual revenue. He believes that the robo-taxi business could earn GM a 澳洲幸运5官方开奖结果体彩网:profit margin of 20%. (To read more, see: Se💮lf Driving Cars Behind $7 Trillion Market by 2050.)

Of course, some analysts would argue that the optimistic outlooks for GM are maybe a littl🦄e too optimistic considꦜering growing that U.S. automobile sector profits are at peak levels and trending lower. In the short term, the SoftBank deal should give GM shares a nice boost, but as economic activity peaks over the medium term, investors may have to wait for the long term to see the real positive impact.