Market Overview

Morgan Stanley Upgrades Tesla On More Realistic Stock Price, Can Weather Coronavirus Downturn

Share:
Morgan Stanley Upgrades Tesla On More Realistic Stock Price, Can Weather Coronavirus Downturn

Tesla Inc (NASDAQ: TSLA) has enough cash and liquidity to make it through short-term economic disruptions from the coronavirus and continues to have a strong long-term thesis, Morgan Stanley said Thursday.

The Tesla Analyst

Adam Jonas upgraded the rating on Tesla from Underweight to Equal-Weight while trimming the price target from $480 to $460.

The Tesla Thesis

Jonas said in a note that Morgan Stanley was having to adjust some estimates, in particular resetting the expectation for Fiscal 2020 deliveries to 420,000 to account for an expected month of lost production at Tesla's Fremont, California plant as the coronavirus forces continued shutdowns of work nationwide. 

"We would expect Tesla to shut the Fremont plant temporarily, in line with most global automakers," Jonas wrote.

But the company's prepared to weather the storm.

"We believe Tesla has sufficient liquidity and access to capital during this time," Jonas wrote. "The stock now trades below our revised $460 target and a more balanced risk-reward drives the move to Equal-weight."

See Also: Munster Says Tesla Can 'Survive' Multiple Quarters Of Fremont Factory Shutdown

Sell-Off Makes Stock More Realistic

Morgan Stanley had downgraded Tesla back in January in the midst of an enormous run-up in share price that had the stock trading close to $1,000. In the wake of the massive sell-off of the past week, the stock is now in more realistic territory.

"The impact of the COVID-19 sell-off has, in our opinion, brought the stock to a more attractive level, where we believe Tesla's share price and valuation today adequately reflects the value of the business," Jonas wrote. "Ultimately, we believe we are at a point where, while economic uncertainty leaves the stock in a volatile position, we believe the stock is in a place where investors can potentially begin to add exposure."

TSLA Price Action

Tesla shares were up 2.48% Thursday morning, trading at $370.20.

Latest Ratings for TSLA

DateFirmActionFromTo
May 2020WedbushMaintainsNeutral
May 2020JMP SecuritiesMaintainsMarket Outperform
May 2020Morgan StanleyMaintainsEqual-Weight

View More Analyst Ratings for TSLA
View the Latest Analyst Ratings

 

Related Articles (TSLA)

View Comments and Join the Discussion!

Posted-In: Adam Jonas Coronavirus electric vehiclesAnalyst Color Upgrades Price Target Top Stories Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
DEWilliam BlairUpgrades
SIXGoldman SachsInitiates Coverage On
HPQCFRAMaintains17.0
DLTRCFRAMaintains110.0
DGCFRAMaintains230.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com