Why General Motors Shares Are Falling Today

General Motors Co GM is trading lower Tuesday after Morgan Stanley analyst Adam Jonas downgraded the stock from an Overweight rating to an Equal-Weight rating and lowered the price target from $75 to $55.

The downgrade was "triggered by a lower than expected 2022 guide," Jonas wrote in a note to clients.

The Morgan Stanley analyst said he re-evaluated GM as a sum-of-the-parts story, which led him to change the valuation methodology from SOTP to discounted free cash flow, resulting in a cut to his price target.

Jonas now expects GM to remain one holistic company for at least the next 12 to 18 months as management builds out its EV, AV and connected car capabilities.

The analyst is still concerned about legacy OEM's, like GM, ability to transition from internal combustion engines to electric vehicles. 

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GM Price Action: General Motors has traded as low as $47.07 and as high as $67.21 over a 52-week period.

The stock was down 4.12% at $48.62 at time of publication.

Photo: courtesy of GM.