General Motors (NYSE:GM) shares jumped to their highest level in more than three years after analysts at Deutsche Bank upgraded the stock to a âbuyâ and hiked its price target.
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In a note to clients Monday, Deutsche Bankâs Rod Lache wrote that GM has quietly taken a lead in the race to build self-driving vehicles. That development may surprise investors, he said. GM is on track to have autonomous cars ready for commercial deployment within quartersâpotentially beating competitors by years.
âWe believe that businesses built off of this platform will ramp much faster than is widely expected,â Lache said.
Deutsche Bank set a new price target for GM at $51, up from a prior $36.
GM jumped 2.5% to $40.38 in recent trading. The stock hit an intraday high of $40.64, its best mark since December 2013.
By Deutsche Bankâs estimates, around 60% of urban households could find a better deal in using autonomous taxi services compared to owning a personal vehicle. Automakers like GM will see the early potential of self-driving vehicles sooner rather than later, according to the investment bank.
Deutsche Bank believes that GMâs mobility business is worth about $30 billion, a valuation that Lache described as âtoo big to ignore.â He expects GM to eventually âsee the meritsâ of spinning off its venture into new technologies, including self-driving vehicles and ride-sharing services.
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