A second financial firm lowered its outlook on shares of General Motors this week. Nomura downgraded the auto stock to neutral from buy on Wednesday and cut its price target to $56 from $66. The new projection implies 13.2% upside from GM's closing price Wednesday. The firm cited a slower-than-expected recovery from the chip shortage and a costly shift to electric vehicles for its downgrade. "We push back GM's recovery from the supply chain issues by one quarter," Nomura's Anindya Das said in a note. "In the near term, we expect the transition to EVs to limit profit growth." Nomura's call comes after Morgan Stanley downgraded the stock on Tuesday, also highlighting concerns over spending in GM's electric- and autonomous-vehicle segments. "Based on GM's commentary at the 4Q21 results briefing, we now expect it to reinvest cash into building its EV and AV (Cruise) businesses, while dialing back on shareholder returns," Das said. "We think this is a prudent strategy, although it caps the outlook for near-term shareholder returns." Still, Das is bullish on GM's longer-term story, as "the company builds on the extensive restructuring of its North American operations and works to vertically integrate its EV business." GM shares are down more than 15% this year. —CNBC's Michael Bloom contributed reporting.
The GM logo is seen on the facade of the General Motors headquarters in Detroit on March 16, 2021.
Rebecca Cook | Reuters
A second financial firm lowered its outlook on shares of General Motors this week.