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Citi reiterates buy rating on GM, issues $87 price target

Yahoo Finance Live anchors discuss Citi reiterating its buy rating on GM.

Video transcript

BRIAN SOZZI: All right, we're also watching shares of General Motors today after Citi reiterated its buy rating on the automaker, an $87 price target, citing several near-term [INAUDIBLE]. And you're not reading things there wrongly. That is their target. So if you do the rough math, the folks at Citi are looking for GM shares to rise about 130%.

JULIE HYMAN: Wow.

BRIAN SOZZI: So very-- I'll change it. That is an aggressive buy rating. Let's focus here--

JULIE HYMAN: And that's a 12-month price target, just to be clear.

BRIAN SOZZI: That is a 12-month, one year.

JULIE HYMAN: One year, it's going to go up by that much.

BRIAN SOZZI: That's big. Huge, huge, huge. Some of the catalysts they cite here-- and this note came out before that GM news on the dividend and the buyback hit this morning. A couple of catalysts. They point to the release of the September-- of the Equinox EV being unveiled in September. Also in September, GM expect to hold a cruise investor event, so probably talk more about their autonomous future. Also noting the Ultium EV battery ramp-- that is also helping them.

And then also, GM slated to have an investor day in New York City in November. So to the analyst's point, there's a lot of potential things here to send GM shares much higher. Whether that's 130% higher-- to be determined.

JULIE HYMAN: Well, and earlier today, the company said it was reinstating its $0.09 a share dividend, although that's a far cry from the $0.38 it used to pay out. It's something and is resuming its share buyback program, sort of a signal of the phase at which GM is right now. As we pointed out earlier, when that headline first came out, the stock wasn't moving very much. Now it is gaining a little bit more, showing a little bit more enthusiasm from investors to that piece of news.

BRIAN SOZZI: I think it's because we highlighted the low valuation here, Julie. I think--

JULIE HYMAN: It's our-- we'll take credit, sure.