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After a string of missed targets, Tesla Inc (NASDAQ:TSLA) could finally be on the brink of getting its Model 3 production on track. One Wall Street analyst sees the milestone as a great opportunity to sell the stock.
The Analyst
Morgan Stanley analyst Adam Jonas reiterated an Equal-Weight rating on Tesla with a $379 price target.
The Thesis
Reaching production targets is the first step in a long journey for Tesla, and there’s simply not enough visibility to recommend buying the stock at the moment, Jonas said in a Friday note. (See the analyst's track record here.)
Improving cash flow numbers and the potential to hit near-term Model 3 targets should give Tesla a sentiment and share price boost, the analyst said.
“Where we have substantially higher conviction on the Tesla story is our longer-term thesis that the company will face greater levels of competition than the market anticipates in the domains of electric vehicles, autonomous vehicles and shared mobility,” Jonas said.
Jonas named four major long-term risks to Tesla’s business for investors to consider:
- Amazon.com, Inc. (NASDAQ:AMZN) may end up a competitor to Tesla in the businesses of transport, trucking and logistics.
- Waymo, the auto unit of Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) is leading the pack of AV competitors, logging more than 5 million test miles. Waymo expects to have an AV fleet deployed by the end of 2018, potentially beating Tesla to the market by five years.
- Global EV infrastructure will require 10 to 20 years and “many trillions of dollars” to construct.
- China may prove a challenge for Tesla due to increasing regulation of foreign companies collecting data on Chinese drivers.
Price Action
Tesla stock traded was down nearly 1 percent Friday and is now down 5.2 percent in the past six months.
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Photo by Brett Hershman.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
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