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Good morning,
two stocks to talk about this morning – General Motors and Lufthansa.
General motors – the shares continue to soar as the as the US government is expect to sell all its shares in the company by the end of the year. This means the company can start paying a dividend and buying back its own shares. It also means it can employ new top executives because before they had restriction on pay packages.
But this is all a bonus because the true valuation of the company has nothing to do with the government’s stake. This just proves that the company can stand on its own feet. We are confident in the future of the company and maintain our 12-month price target of $54/share.
Lufthansa – Lufthansa is now trading above our price target of E15.5. the shares have rallied more than 7% in just two week. This is on the back of positive data from other airlines and a feel good factor for the industry. We believe there is further upside to our price target as we factored in a low multiple into our valuation model. We will update our report but in the meantime remain holders of the name.
Good day and happy trading!
Kristian Camenzuli
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