By Sam Boughedda
Investing.com -- General Motors Company (NYSE:GM) fell over 5% Tuesday after Morgan Stanley downgraded the stock over concerns about its concerns around the company's shift from internal combustion engines to electric vehicles.
Analyst Adam Jonas downgraded GM to Equal Weight from Overweight, also pointing to the company's lower than expected 2022 guidance coming in below his expectations.
Jonas said the fiscal 2022 guidance was well below their forecasts, triggering "an estimate cut of 11% for FY22 and 16% for FY23. This marks the most significant estimate reduction we have made for GM since the start of COVID in early FY20."
"While 4Q21 results were modestly better than expected, GM guided to Adj. EBIT and EPS for 2022 that was materially lower than our forecast due to cost creep and deteriorating mix," he added.
Furthermore, the analyst now expects "GM to remain one holistic company" for at least 12 to 18 months as management builds out its electric vehicle, autonomous vehicle and connected car capabilities.
From a note released last week, it is clear Jonas favors Tesla (NASDAQ:TSLA) over other EV manufacturers. The analyst said they expect Tesla revenues to be larger than General Motors and Ford combined by 2027.