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 â€œbuyâ€ and hiked its price target.
In a note to clients Monday, Deutsche Bankâ€™s 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 quartersâ€”potentially beating competitors by years.
â€œWe 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 Bankâ€™s 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 GMâ€™s mobility business is worth about $30 billion, a valuation that Lache described as â€œtoo big to ignore.â€ He expects GM to eventually â€œsee the meritsâ€ of spinning off its venture into new technologies, including self-driving vehicles and ride-sharing services.
|GM||GENERAL MOTORS CO.||59.71||-1.31||-2.15%|