General Motors shares fell lower Tuesday, after analysts at Morgan Stanley lowered their rating and price target on the automaker’s stock.
Morgan Stanley analyst Adam Jonas slashed his rating on General Motors to equal-weight. The analyst lowered his price target by $20 to $55 per share. Jonas mentioned that GM’s shift to electric vehicles will likely lead to a negative compound annual growth rate of overall revenues, between now and the end of the decade.
According to Jonas, GM's near-term projections including 2022 earnings of around $14 billion, capital spending of around $10 billion a year for the next several years, has led to the "most significant estimates reduction” Morgan Stanley has made for GM since the start of Covid. The analyst’s revised forecast on earnings per share is $6.64 -- approximately 11% lower than the prior outlook.
"We now expect GM to remain one holistic company for at least the next 12-18 months as management builds out its EV, AV and connected capabilities," Jonas said. However, the analysts maintains concerns around the automaker’s shift from ICE to electrification.