Wall Street has big expectations for GM.

General Motors stock appears to be in the midst of an end-of-the-year rally, and could see further growth in 2011, according to some key investment analysts.

The maker’s sudden surge reflects the fact that Wall Street is stepping up both its coverage of the new GM stock – and giving it a clear thumbs up, Credit Suisse, for one, projecting GM to “outperform” the overall market.

The maker’s shares jumped 2% on Tuesday, climbing 72 cents to $35.32.  The really continues today, GM stock up another 54 cents just before the noon hour, at $35.86.  And expectations could push things significantly higher.

“GM offers an attractive 12-18-month investment opportunity,” said Credit Suisse’s automotive analyst Christopher Ceraso.

The bank was one of eight to resume coverage of General Motors stock this week.  Some served as underwriters of the GM IPO, meaning they were legally barred from covering or recommending the stock until 40 days after the initial offering.

General Motors CEO Dan Akerson (center) rings the opening bell at the New York Stock Exchange to mark the maker's return to public trading, last month.

Wall Street had walked away from GM as the maker plunged into bankruptcy early last year.  That move wiped out tens of billions of dollars in investor holdings – along with significant bondholder assets and billions more in debt.

GM emerged from Chapter 11 protection in July 2010 as a privately-held company, with the federal government holding a 61% stake in return for a taxpayer-funded bailout worth $49.5 billion.

The Treasury’s stake was cut nearly in half, last month, when GM staged a long-awaited initial public offering.  In the days prior to that IPO, strong demand convinced the maker and its underwriting to sharply increase both the number of shares put on the block and the price tag, which jumped to $32 per share.

Various analysts are now forecasting a price target for GM ranging from $38 all the way up to $50.

There are a variety of reasons why.  For one thing, the maker has shown an ability to turn out significant profits despite the still-depressed American automotive market.  In the years leading up to its bankruptcy, GM lost $70 billion – and even went into the red during some of the best years in the industry’s history.

A nascent turnaround in North America is clearly a factor.  But analysts also point to GM’s strong performance in emerging markets, notably including China.  Through its Buick brand and other joint ventures, GM in October became the first automaker ever to sell 2 million vehicles in a single year in China.

There are some uncertainties, however, notably including the struggling GM Europe operations – in which the maker came close to selling off a majority stake last year.  And rising raw materials costs, as well as the latest surge in petroleum prices, could deliver significant headwinds, as well, analysts warn.

Ironically, GM’s stock prospects are being buoyed by its traditional, cross-town rival, Ford Motor Co.  Ford shares have risen from a 2008 low of barely $1 to recent highs of around $17.  That means the maker is trading for around 5.5 times its estimated value – while GM is currently trading at a 3.9 multiple.

“Thus, we think investors have an opportunity to buy GM at a depressed value,” Ceraso said in his report.

Investors aren’t the only ones hoping to see GM do well on the market.  Despite the last-minute increase in the initial strike price prior to the IPO, the government lost billions on the shares it sold.  To recover its full investment, analysts estimate it will need to sell off the remaining Treasury stake at around $46 a share.