TLDR
- Morgan Stanley analyst Andrew Percoco upgraded GM to Buy with a $90 price target, up from $54
- Tesla downgraded to Hold despite raised price target of $425, while Rivian also cut to Hold
- Lucid slashed to Sell with price target dropping from $30 to $10 on EV market concerns
- Removal of $7,500 EV tax credit creates advantage for traditional automakers through 2026
- GM praised for strong execution including $10 billion share buyback and improved inventory management
Morgan Stanley made sweeping changes to automotive coverage Monday under new analyst Andrew Percoco. The moves favor traditional automakers while pressuring pure electric vehicle companies.
Percoco upgraded GM to Buy from Hold and lifted the price target to $90 from $54. That’s a 67% jump in valuation. GM shares climbed 1.6% in premarket trading to $77.30.
The analyst sees clear benefits for legacy automakers. President Trump ended the $7,500 federal EV purchase tax credit in September. This shift creates an “EV winter” lasting through 2026 according to Percoco.
Lower EV adoption means stronger sales of gas-powered vehicles. That plays directly into GM’s wheelhouse. The company has industry-leading U.S. inventory management and strong incentive discipline.
Capital Allocation Wins
GM executed a $10 billion accelerated share repurchase program over the past year. Management also increased dividends for four straight years. The current yield sits at 0.79%.
The automaker invested $4 billion in U.S. operations for supply chain realignment. This helps mitigate tariff exposure. GM also improved its International business and adjusted China operations to handle competitive pressures.
Morgan Stanley called out reduced policy uncertainty and potential rate cuts in late 2026 as additional positives. Lower rates could improve vehicle affordability.
Analyst coverage remains bullish on GM. Currently 63% rate shares Buy versus a 55% average for S&P 500 stocks. The average analyst price target stands at $77.
EV Makers Face Pressure
Tesla dropped to Hold from Buy even as Percoco raised the target to $425 from $410. The stock fell 1.3% in premarket to $449.13. AI opportunities in self-driving and robotics are priced in according to the analyst.
Rivian also got cut to Hold from Buy. The $12 price target stayed unchanged. Shares dropped 2.8% to $17.44 despite gaining 35% year-to-date heading into Monday.
Lucid took the biggest hit with a downgrade to Sell from Hold. The price target crashed from $30 to $10. Shares fell 3.4% to $12.96 in premarket.
Lucid entered Monday down 56% for the year. Just 14% of analysts rate it Buy while 36% say Sell. The S&P 500 average Sell rating is only 7%.
For Tesla, 39% of analysts rate shares Buy with an average target of $401. Rivian has 30% Buy ratings and a $15 average target.
Strong Performance Metrics
GM stock trades at $76.05, sitting just 1% below its 52-week high of $77. The shares surged 60.9% over the past six months. Analyst price targets range from $46 to $100.
The company demonstrated strong operational execution across multiple areas. This includes tariff mitigation through supply chain changes and right-sizing international operations.
Morgan Stanley’s analysis shows traditional automakers gaining market share as EV adoption slows. GM stands positioned to capture sales from buyers who would have purchased electric vehicles with the tax credit in place.
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