Why Deutsche Bank Is Picking GM Over Tesla

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General Motors Co. (NYSE: GM) shares made a handy gain on Monday following an incredible upgrade. When considering the autonomous vehicle (AV) industry, Tesla Inc. (NASDAQ: TSLA) comes to mind as the front-runner. However, this analyst actually believes GM can capitalize on this market far more than Tesla.

Deutsche Bank raised GM to a Buy rating from Hold with a $51 price target, implying an upside of 29.4% from the most recent closing price of $39.42. Keep in mind that this firm only has a Hold rating for Tesla.

Rod Lache was on the call for Deutsche Bank and he believes that up to 60% of U.S. households in cities might be more inclined to use autonomous vehicle services, as opposed to owning a car. At the same time, he went as far as to say that 2% of U.S. miles driven in 2025 will be through autonomous vehicle services.

The investment bank suggests that GM can grab about 17.5% of the total AV market share.

In the report Lache said:

GM’s AV’s will be ready for commercial deployment, without human drivers, much sooner than widely expected (within quarters, not years), and potentially years ahead of competitors. We believe that businesses built off of this platform will ramp much faster than is widely expected. A fast ramp could perpetuate sustainable advantages. And we believe that this will be material, even to a company of GM’s size.

Excluding Monday’s move, GM has outperformed the broad markets with the stock up over 13% year to date. Over the past 52 weeks, the stock is up about 22%.

Shares of GM were last seen up just over 2% at $40.34, with a consensus analyst price target of $38.87 and a 52-week trading range of $30.21 to $40.64.

Tesla shares were down over 1% at $346.62. The stock has a 52-week range of $178.19 to $389.61 and a consensus price target of $319.94.