) to outperform from neutral.
On Tuesday the company posted $1.39 first quarter earnings per share. Analyst Michael Ward says his upgrade is based on a more bullish outlook in the North American vehicle industry, better than expected first quarter results, and the potential for upward EPS revisions and valuation.
He notes the company took a first quarter charge, which should provide cost savings over the coming quarters, and lead to pretax breakeven results in 2003. He says the balance sheet remains sound, that GM has been profitable through this cycle, and that its dividend has been unchanged; all positive variables that should allow continued expansion in GM's trading multiple. Ward has a $72 12-month target, and a multiple of 12 times his 2003 EPS estimates.