Every day, Wall Street analysts upgrade some stocks, downgrade others, and "initiate coverage" on a few more. But do these analysts even know what they're talking about? Today, we're taking one high-profile Wall Street pick and putting it under the microscope...

2017 has not been generous to General Motors (NYSE:GM) shareholders. Over the past six months, GM stock has gained a whopping $0.17 in value, rising from $34.40 at the start of the year to all of $34.57 at market close yesterday. But if General Motors management makes the right moves, GM stock could transform that 17-cent gain into a 44-percent gain in stock price over the next 12 months.

Or at least Morgan Stanley thinks so. Here are three reasons why.

Cadillac CT6 Plug-in Sedan

Electrifying Cadillac could be one way to give General Motors' stock price a jump. Image source: General Motors.

1. What Morgan Stanley thinks will happen

Morgan Stanley reinitiated coverage of GM stock yesterday, assigning GM a rating of overweight (i.e., buy). According to StreetInsider.com (requires subscription), this is the first time Morgan Stanley has said anything about GM since dropping coverage back in February.

Morgan Stanley thinks General Motors is probably worth about $40, although it only presently costs about $35 a share. That difference right there offers investors a chance to profit nearly 16% as GM stock returns to fair value, while also collecting a 4.4% dividend yield -- roughly 20% in potential profits all told.

But it's not all Morgan Stanley sees in store.

2. What Morgan Stanley hopes will happen

If things work out like it hopes they will, Morgan Stanley believes General Motors stock could actually be worth closer to $50 a share -- and deliver investors a 44% profit from today's prices (plus that juicy 4.4% dividend yield). Here's how:

According to the analyst, GM "holds some key cards in product segmentation, brand, and technology that, properly played, can unlock significant shareholder value." Breaking the company down into the individual values of its constituent parts, then adding those back up again is how Morgan Stanley comes up with its $50 best-case-scenario valuation.

As the analyst explains, currently, there are certain "parts" of GM's business that appear to be valued at "zero" based on the stock's current price. But if GM should spin off, sell, or enter into partnership agreements to better monetize these parts, this would unlock their true value, and permit GM's stock price to rise. For example, Morgan Stanley has previously suggested (in a note predicting even higher values for GM stock) that GM might turn Cadillac into a "captive Tesla" within its portfolio of brands -- electrifying its Caddies, and positioning the brand as GM's luxury electric division.

Another example: Morgan Stanley says the millions of GM cars on the road today drive "roughly 2.5 billion miles per day" in total. That's a huge amount of driving data that could be used by automotive technology companies (think mapping software, ride-sharing apps, and driverless car tech). "But [data on] the vast majority of these miles are not captured by the company," and thus cannot be monetized at present. Partnerships with software and emerging driverless tech companies, to mine this data, could conceivably create entirely new revenue streams for GM.

3. Will all of this happen?

In short, "GM has a number of assets and businesses that are of potentially high strategic value to outside players or partners who are keen on entering the global mobility space." All it needs now is to actually exploit these assets to add 44% to its stock price.

Granted, at 120 years of age, General Motors is no spring chicken, and not exactly known as the most forward-thinking of automakers -- so Morgan Stanley's hoped-for "GM Revolution" may never come to pass. Yet after nearly a decade of hemming and hawing, GM did finally sell off its Opel division to Peugot earlier this year. In this, Morgan Stanley sees evidence that the company is finally ready "to consider more radical changes in the business."

Maybe even as radical as the steps Morgan Stanley suggests.

The upshot for investors

Selling for a mere 5.2 times trailing earnings, and projected by most analysts to be able to grow earnings at nearly 8% annually over the next five years, GM stock is cheap by any measure. Whether or not GM decides to upend its entire business and put it back together in a way that delivers a 44% rise in stock price in just 12 months, I think the stock's a buy.