General Motors signed a memorandum of understanding with Honda Motor to jointly develop future vehicle platforms in the North American market. Shares of General Motors gained 1.8% on Friday.
President of General Motors (GM) Mark Reuss said that “This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources. Given our strong track record of collaboration, the companies would realize significant synergies in the development of today’s vehicle portfolio.”
Executive vice president of Honda Motor, Seiji Kuraishi said, “Through this new alliance with GM, we can achieve substantial cost efficiencies in North America that will enable us to invest in future mobility technology, while maintaining our own distinct and competitive product offerings.” (See GM stock analysis on TipRanks).
Last month, Morgan Stanley analyst Adam Jonas raised the stock’s price target to $46 (53.3% upside potential) from $43 and reiterated a Buy rating. Jonas is optimistic about General Motors’ in-house battery capabilities and its initiatives to support internal and third-party supply-chain.
Currently, the Street has a cautiously optimistic outlook on GM stock. The Moderate Buy analyst consensus is based on 10 Buys, 3 Holds, and 1 Sell. The average analyst price target of $33.46 implies upside potential of 11.5% to current levels. Shares are down 18% year-to-date.