CFRA Research upgraded General Motors (NYSE:GM) to a Hold rating (from Sell) and raised their price target on the stock to $35.00 (from $31.00) as the automaker continues to benefit from favorable demand following 1Q results.

Analysts wrote in a note, “While we continue to believe the near-term earnings drag from GM’s EV transition will be significant and have doubts about its production ramp-up plan (as well as ultimate demand for its EV models), the company continues to benefit from more favorable demand for its vehicle brands, as U.S. sales of Buick Cadillac and Chevy were all up strongly in Q1. We raise our rating one notch to Hold on valuation.”

GM posted 1Q adjusted EPS of $2.21, well ahead of the $1.73 consensus. The beat was driven by a stronger-than-expected top line, as revenue rose 11% to $39.99 billion ($610 million above consensus) and adjusted EBIT margin contracted 170 bps to 9.5%.

GM raised 2023 adjusted EPS guidance to $6.35-$7.35 from $6.00-$7.00, versus the current consensus of $6.13.

CFRA raise adjusted EPS estimates to $6.75 from $6.35 for ’23 and to $6.40 from $6.15 for ’24.

Shares of GM are up 2.57% in pre-market trading on Tuesday.