In a report published Wednesday, Morgan Stanley analyst Adam Jonas reiterated an Underweight rating on General Motors Company GM, but removed the $33.00 price target.
In the report, Morgan Stanley noted, “The fate of GM's earnings and share price will be dominated by the path of N. American EBIT. In our view, even if positive surprises in Europe and Asia were to mathematically offset a shortfall in GMNA, it's GM's domestic market that will ultimately move the needle. GM targets an NA EBIT margin of 10% by mid-decade. Most expect a 10% margin to be reached by 2016 or shortly thereafter. In our opinion, 2015 may be GM's best shot to reach its 10% goal (better than BMW's auto margin in 2013). Nevertheless, we forecast GMNA margins peaking at 8%, before landing at 5% longer term, forming the basis of our $4.00 EPS forecast in 2015, which stands 16% below consensus expectations.”
General Motors Company closed on Tuesday at $33.07.
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