General Motors Co. (GM) just got a significant vote of confidence from Piper Sandler, and it's all about cash flow and avoiding the worst headaches plaguing other automakers.

The Upgrade: Analyst Alexander Potter moved his rating from Neutral to Overweight and bumped the price target from $66 to $78, marking an 18% increase.

Why the Optimism? Potter believes GM can exceed current consensus estimates thanks to two key advantages: minimal exposure to Chinese competitors and what he calls "a less punitive EPA (Environmental Protection Agency)." With limited China risk hanging over its head, the automaker looks positioned to "continue generating cash, defending price, and buying back stock," according to the note.

Potter raised his earnings estimates substantially. For 2025, he's projecting $10.65 per share compared to consensus of $10.31. For 2026, his target is $12.27 versus $11.82. And for 2027, he sees $14.02 against consensus of $13.55.

The Reality Check: Potter didn't sugarcoat GM's shortcomings. The company has fallen behind competitors in developing in-house electrical architectures, and its prospects in autonomous driving are "iffy," he noted. But here's the thing: despite being "an old-school carmaker," GM "makes a lot of money."

Price Action: Shares of GM declined 3.29% to $82.31 at the time of publication on Friday.