Morgan Stanley Downgrades General Motors, Says Global Auto Industry Is Entering 'An Epoch Of Significant Technology Disruption'

Shares of

are down another 2.1 percent to $33.80 after the company was fined $28,000 by the National Highway Transportation Safety Administration for failing to respond to some requests. To make matters worse for shareholders, Morgan Stanley downgraded the stock from Overweight to Underweight and lowered the price target from $49 to $33. Analyst Adam Jonas believes the global auto industry “is entering an epoch of significant technology disruption.” “Seasonally annual adjusted rate could hit all-time high of >17m units within the next 24 months, but the cost to achieve that growth is high,” according to Jonas. Investor N.A. margins and capital return expectations are “inappropriately high,” said the analyst. Jonas sees a “war of attrition featuring a decade-long capex arms race,” that not everyone can win. The Morgan Stanley analyst lowered his 2015 earning per share estimate by 15 percent to $4.00, which is 10 percent below the consensus estimate.