Morgan Stanley Boosts GM Target Ahead Of 'Profound Narrative Change'

Morgan Stanley analyst Adam Jonas raised the firm's price target on General Motors (GM) to $57 from $53 and keeps an Overweight rating on the shares.

The analyst introduced his "GM Connected Services model," which explores the potential of subscription-based, recurring revenue derived from GM's connected fleet. GM is offering fleet services today and appears to have "big plans to grow the business," Jonas tells investors in a research note. The analyst sees "scope for a profound narrative change in 2021." Just like Tesla (TSLA) monetizes autonomy through its full self-driving product, it seems GM is ready to increase monetization of its own autonomy solution called "Super Cruise," Jonas writes.

He believes GM may be in a position to increase disclosure around the nature and growth of its services business, which "can help transparency and expand the multiple."

 

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