NEW YORK (TheStreet) -- Shares of General Motors Co. (GM) are down -1.80% to $33.91 in pre-market trade after Morgan Stanley (MS) downgraded the automaker to "underweight: from "equalweight," and cut its price target to $33 from $49.
The firm's analyst Adam Jonas sees the auto industry entering an era of 'significant technology disruption.'
The analyst said,
The pressures will challenge conventional thinking on capital allocation, engineering and human resources. We think the market's got it right on GM valuation and no longer see significant risk-adjusted upside ... GM is highly levered to a cyclical recovery in the North America car market, augmented by an aggressive product revival.
Continuing, he added, "The biggest fundamental opportunity for the 'new GM' is to take risk on the top line (new products and technology) that its predecessor was never able to adequately withstand. GM will need to muster every bit of its financial and technological resources to make the transition to advanced powertrains, connected vehicles and, ultimately, autonomous cars."
TheStreet Ratings team rates GENERAL MOTORS CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GENERAL MOTORS CO (GM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income."