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Banc of America Upgrades GM to Neutral


From Standard & Poor's Equity Research

Banc of America upgrades General Motors (GM) to neutral from sell. Nissan Motor Co.'s board approves talks with GM over a possible alliance.

BofA analyst Ronald Tadross notes that Renault-Nissan's CEO, Carlos Ghosn, and support of investment in GM is counter to what he expected. He feels it is more likely than not to happen given his track record. He notes it would equate to positive management infusion that could yield short-term to medium-term benefits, and underscores 9.9% holder Tracinda's activist involvement. Tadross does not think a Renault- Nissan-GM combination has fundamental long-term merit, but this does not mean it will not happen.

The analyst raised his $15 price target to $30, as he expects investors to focus largely on enterprise value-to-EBITDA and other traditional metrics.


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