Morgan Stanley analysts upgraded General Motors (NYSE:GM) shares to Overweight from Equal Weight with the price target also raised ($38 vs prior $35 per share).

The analysts also hiked the bull-case forecast for GM stock to $60 from $50 per share. They believe GM stock is “oversold” and it offers an “attractive risk-reward skew with the well-tested $30 support level.”

They also highlighted the recent beat-and-raise quarter while the internal combustion franchise is proving to be stronger and more resilient than anticipated.

“We expect a more gradual de-adoption of internal combustion in the US market versus expectations and a materially higher level of free cash flow conversion over the course of the internal combustion runoff vs. history due to lower investment burden and a more targeted/premium approach,” they said in a note.

Moreover, Morgan Stanley analysts praise the management for demonstrating capital discipline.

“We have increased belief that the forward capital allocation strategy (specifically the EV and EV investment strategies) will be approached with great discipline in a nimble and flexible fashion,” they added.

In addition to upgrading GM stock, Morgan Stanley also placed it within the top 5 of 29 automotive and auto-related stocks they cover.

GM shares are up 2.6% in premarket Monday.