GM shares take a dive on analyst report image

Following a Morgan Stanley analyst target price cut, the shares of the largest US automaker went down almost 6% on warnings about the disruptions caused by the technology companies implicated in the autonomous driving race.

Morgan Stanley analyst Adam Jonas reduced his target price for the stock to $27 from $29 and further toned down his initial estimates of GM’s profits for 2015 through 2017. The negative feedback follows swiftly after positive presentations held by the company with its investors last week.

“We believe many elements from Ford’s recent profit warning are applicable to GM’s outlook through 2015 and beyond,” Jonas wrote in his note. “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. We really do believe in what we are writing on the future of autos without human drivers, without individual/private ownership and with entirely new players competing for the growth in 10 trillion miles traveled annually,” he added.

GM’s stock dropped $1.98 or 5.9% to $31.77, the lowest since June 24, 2013. The company last week focused during its investor day on new model introductions, particularly in China. The world’s largest single market has also become a more profitable venue for GM, which now sells there more vehicles than in North America. The grim outlook in Russia, Opel’s losses in Europe or the growing recall costs were “overlooked” elegantly.