Here's Why Morgan Stanley Bumped Up Tesla's Price Target By 33%

  • Morgan Stanley analyst Adam Jonas raised the price target on Tesla Inc TSLA to $1,200 from $900, implying a 32% upside, and reiterated an Overweight rating on the shares following better than expected Q3 results.
  • Tesla over the next 12 months can demonstrate its manufacturing leadership, a "step change in costs/complexity and higher growth in the vehicle user base," Jonas notes. 
  • The $1,200 target implies roughly half the company's growth target, a "constrained" China and virtually no autonomy, says the analyst. 
  • Jonas notes that the target raise is driven predominantly by higher volume assumptions. 
  • His revised volume forecast of 8.1M units by 2030 implies an annual growth rate of 28%, slightly more than half the 50% growth rate targeted by Tesla over the long term.
  • Jonas said that Tesla Q3 sales surged by approximately 70% according to his calculations, even though global automobile production fell by about 20%. 
  • Beyond vehicle sales, Tesla's software business and tech in areas like insurance and battery supply would allow it to become a "champion," added Jonas.
  • Price Action: TSLA shares traded higher by 2.62% at $933.50 premarket on the last check Monday.

Posted In: BriefsNewsPrice TargetReiterationAnalyst RatingsMoversTechTrading Ideas

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