Tesla's Shares Are Having A Tough Time This Year, But Morgan Stanley Sees Wild Upswing On The Horizon
AInvestMonday, Feb 26, 2024 4:20 am ET
1min read
TSLA --

Recent plunges in other electric vehicle stocks have led some analysts to believe that they are undervalued.

Morgan Stanley analyst Adam Jonas even believes that Tesla's stock price could accelerate and increase by nearly 75%. He reaffirmed his overweight rating on Tesla in mid-February, with a target price of $345.

Jonas and his team acknowledge that the market is generally bearish on this leading company in the electric vehicle industry. However, they believe that many investors' views on the company's business are too narrow.

In their view, Tesla will also benefit from advancements in artificial intelligence (AI) and other hot tech areas. For example, the company is developing Optimus and describes it as a general-purpose, bipedal humanoid robot capable of performing unsafe, repetitive, or boring tasks.

Morgan Stanley analysts state, Our thesis on Tesla is that it is both an auto stock and an energy, AI/robotics company. In fact, our valuation of the core auto business ($75/share) represents just 22% of our $345 price target.

In their view, although the current weakness in the electric vehicle market is detrimental to manufacturers such as Tesla, the negative impact on its stock price will be short-term.

It's known that Jonas and his team have long been bullish on Tesla, but they lowered their expectations for Tesla earlier. In January this year, they lowered their target price for the stock from $380 to the current level because of oversupply in the electric vehicle market.

However, Analyst Eric Volkman disagrees with Jonas's optimistic view of Tesla. Volkman believes that the influx of consumers into electric vehicles seems to have ended, while the company continues to lower prices to boost sales.

Volkman is also pessimistic about Tesla's Autopilot system, stating that it seems to require more development and testing.

In fact, Tesla's stock price has fallen nearly 23% since the beginning of the year, resulting in an approximately $188 billion loss from its valuation. As of the close last Friday, the stock was slightly below $192, with a company market value of just slightly over $600 billion.


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