As previously reported, Morgan Stanley double upgraded American Axle (AXL) and BorgWarner (BWA), each to Overweight from Underweight, as coverage of both stocks was transferred to analyst Armintas Sinkevicius. The auto industry is going through an "unprecedented period of cyclical and secular change" and investors are currently skewed negative on U.S. autos and shared mobility stocks, the firm said. However, they see "more road left for Auto 1.0," they tell investors. Sinkevicius sees room for positive estimate revisions for the Auto 1.0 suppliers, while he also sees risk to the multiple for the Auto 2.0 suppliers as adoption of autonomous vehicles may be pushed out. The analyst has a $21 price target on American Axle, citing his view that the stock has the potential to re-rate as free cash flow is used to delever. Sinkevicius set a $61 price target on BorgWarner, as he believes there may be room for positive guidance revisions in the near term and his own estimates are above consensus for 2018.