On Wednesday, Morgan Stanley made an adjustment to its outlook on General Motors (NYSE:GM) shares, raising the price target to $46 from the previous $43, while reiterating an Overweight rating. The firm's analysis comes as a proactive measure ahead of General Motors' first-quarter financial results, indicating a recalibration of their expectations for the automaker.
The revision in the price target was attributed to several changes in the firm's financial model for General Motors. Notably, the forecast for restructuring and impairment charges related to electric and autonomous vehicle ventures for the full year was doubled to $3 billion. Additionally, the firm reduced the anticipated capital expenditures to the lower end of the company's guidance.
In light of these adjustments, Morgan Stanley also increased its earnings per share (EPS) estimate for General Motors by 9%. The analyst's commentary highlighted the updates to the financial model, stating the need to 'mark to market' their assessment in anticipation of the upcoming quarterly report.
Despite the increased price target for General Motors, the analyst specified a preference for Ford (NYSE:NYSE:F), without changing the positive Overweight stance on GM. The Overweight rating suggests that Morgan Stanley expects the stock to outperform the average total return of the stocks in the analyst's coverage universe over the next 12 to 18 months.
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