GM: An Early Leader In The Connected Car Space?

• This year, General Motors Company GM declined nearly 16 percent.
• Brian Johnson at Barclays said that GM deserves more credit than it gets, while also forecasting that the "bottom of the cycle" may not come for "several years."
• Johnson said that GM's management should focus on how it can be a "leader over the long term in disruption within the automotive industry."

Ahead of GM's investor day this week, Barclays' Brian Johnson reiterated the firm's Equal Weight rating and $36 price target on the stock.

Johnson said that management will likely reiterate its prior stated guidance and attempt to show why GM can be a leader disrupting the automotive industry. Despite the potential, however, Johnson predicted that investor sentiment would not improve in the near term based on a variety of factors.

Johnson argued that GM is "an early leader in ‘connected car' technologies," but noted that perception may take time to change. That perception is instead fixated on how Apple Inc. AAPL and Google Inc GOOG will impact traditional manufacturers. At its investor day, Johnson recommended that GM use it to argue how it, not Apple or Google, can be a leader in auto disruption.

However, GM is fighting an uphill battle. "Yet, in spite of its achievements thus far in this realm, investors have failed to recognize GM as a leader in the ‘Connected Car' domain, and it will likely take some time for investor perception to amply shift," Johnson concluded.

Instead of talking up its shares, Johnson said that GM needs to "first prove that it can remain profitable through the bottom of the cycle" before investors reward it with higher multiples.