Why Tesla And This Automaker Are 'Shelter In Inflationary Storm'

Zinger Key Points
  • Morgan Stanley analyst Adam Jones has an Outperform rating and $1,300 price target for Tesla shares.
  • The analyst expects Tesla to sell less than 1.5 million vehicles in 2022 due to materially lower demand for the company's premium-priced cars.
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The outlook for companies and stocks are mired by numerous uncertainties that are currently at play. Even as investors remained dithery over how the Fed's monetary policy normalization could impact their top- and bottom-lines, the Ukrainian crisis came as an added shock.

An analyst at Morgan Stanley has a couple recommendation for these trying times.

Traits Of A Good Company: Companies with a strong brand, long order backlog, strong balance sheet as well as access to capital and strong pricing power are likely to thrive in a supply constrained, macro uncertain and inflationary environment, analyst Adam Jonas said in a note.

Tesla, Inc. TSLA and Ferrari N.V. RACE are the names that come close to "ticking all the boxes," the analyst said.

Tesla A Safe Haven? Tesla is now seemingly perceived as a relative safe haven due to its pre-existing capacity, deterministic access to key materials at scale, and supply chain relationships, Jones said.

The analyst expects Tesla to sell less than 1.5 million vehicles in 2022 due to materially lower demand for the company's premium-priced cars.

"For this year, at least, a stronger economy would not help Tesla sell more than 1.5mm units as we see this as butting up against physical capacity to produce," Jonas said.

Related Link: EV Week In Review: Tesla Giga Berlin Update, Rivian Crashes On Price Hike Gaffe, Lucid Slashes Guidance, Honda-Sony Team Up, Nio Headed To Hong Kong And More

Supply chain disruptions could lead the company to announce temporary price increases to fully or partially pass through to consumers, the analyst noted.

Longer term, Jonas expects Tesla to systematically invest in margin and use manufacturing/scale improvements to substantially lower the acquisition costs of their vehicles to consumers. Ultimately, the company can reach a price point of $15,000-$20,000, which will in turn help lock significant new markets in countries like India, he added.

Ratings/Price Target: Jonas has an Outperform rating and $1,300 price target for Tesla shares.

The analyst has a Neutral rating and $350 price target for Ferrari.

Tesla closed Friday's session at $838.29, down 0.12% and Ferrari shares ended at $198.41, down 2.62%.

Related Link: Elon Musk Says He Is A 'Free Speech Absolutist' After Refusing To Block Russian New Sources On Starlink

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Posted In: Analyst ColorReiterationAnalyst RatingsAdam Jonaselectric vehicles
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