GM (GM) Slammed as Morgan Stanley Rings the Warning Bell

Shares of General Motors (NYSE: GM) are sharply lower Tuesday amid negative comments from Morgan Stanley analyst Adam Jonas, who today slashed estimates on the auto maker saying they aren't going to wait around for GM to warn.

"We believe many elements from Ford’s recent profit warning are applicable to GM's outlook through 2015 and beyond," Jonas commented. "At its investor day, GM understandably focused its attention on reestablishing cultural and strategic momentum. They didn't warn, so we're doing it for them."

The firm is reducing GM estimates by 9% to 24% from 2015 through 2017. They see GM earnings peaking at $3.62 in 2015 (GMNA margin of 7.7%), fading to $2.86 by 2017. "Ford’s reduced outlook was based on increased macro pressure in Russia, Latin America, FX and quality-related issues. On our calculations, GM’s exposure to each of these factors is at least as great as Ford's," the analyst said.

FY 2014 EPS was cut from $2.79 to $2.76 versus the consensus of $2.70, FY 2015 EPS was cut from $3.98 to $3.62 versus the consensus of $4.51 and FY 2016 EPS was cut from $4.01 to $3.57 versus the consensus of $4.85.

The firm is maintaining an Underperform rating and cut its price target to $27.00 (from $29.00)

For an analyst ratings summary and ratings history on General Motors click here. For more ratings news on General Motors click here.

Shares of General Motors are down 5% mid-day to $32.05.

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