General Motors (GM) PT Slashed at Morgan Stanley

In addition to his downgrade of Ford today, Morgan Stanley analyst Adam Jonas reiterated an Underweight rating and cut his price target on General Motors (NYSE: GM) to $29.00 (from $33.00).

"Despite the expectation of material improvement in European profitability, we see further weakness in shares of GM as it appears overly dependent on a peaking US auto cycle," Jonas said.

The firm's 2015 and 2016 earnings forecasts of $3.98 and $4.01 remain well below consensus by a margin of 12% and 17% respectively.

He added, "Like Ford, GM should demonstrate a material improvement in European profitability from cyclical lows. However, virtually every auto stock we cover globally will show fast improving results in Europe (i.e. you don´t need to own GM or Ford for Europe!). Moreover, if our prediction about N. American profitability going ex-growth comes to fruition, we believe a bounce in profit in international regions will do little to offset the impact. Notwithstanding the improvements made to each company over the past 6 years, GM and Ford are still overdependent on the N. American auto cycle."

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 closed at $34.58 yesterday.

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