Morgan Stanley seems to be getting what Tesla is all about, finally!. The bull case raised to $2,636
Morgan Stanley analyst Adam Jonas upgraded Tesla to Equal Weight from Underweight and raised his price target from $1,050 to $1,360. Bull case raised to $2,636 from $2,500, Bear case valuation raised to $510 from $375
Two weeks ago after Tesla posted an impressive second quarter profitable earnings, Morgan Stanley analyst Adam Jonas raised Tesla Stock bullish price target to $2500, all the way from $740 just 3 weeks ago. A massive rally of over 50% from the current price of $1500. “It’s becoming increasingly obvious that Tesla is going to become a very large company, approaching (if not exceeding) Toyota or VW revenues in the next decade and leaving the world’s largest luxury OEMs behind.”
Yesterday Adam Jonas raised his target from $1,050 to $1,360 a few weeks ahead of Tesla Battery Day. It’s just a matter of time before that price target is raised again from $1,360 to $1,600 ;).
“Following our downgrade to Underweight this past June and our recent price target increase to $1,050, we had expressed our belief that the direction of Tesla shares from this point may most likely be driven by factors beyond the business of selling cars. Specifically, we have explored two business models that have the potential to take Tesla shares higher from here: 1) Software/services revenue, 2) the supply of batteries and EV/powertrains to 3rd part OEMs.”
The Tesla Battery Day on September 22 could be a game-changer and based on what we know so far, there is a growing risk of Tesla becoming a new battery competitor armed with superior technology. This risk seems to be overlooked by financial markets and we believe that investors are in a bit of a ‘wait-and-see’ mode, looking for more clarity. However, we think it presents a potential long-term headwind, limiting the scope for margin improvement and perception of the value of existing significant order books.
Tesla Is The Amazon Of the Auto Industry and The battery Industry
According to Adam Jonas and his team of tech analysts, Tesla is clearly the Amazon of the Auto industry, and will become the Amazon of the battery industry as well.
Tesla has the ability to now make its own batteries at lower costs via technology. The company has its own IP via Maxwell and is no longer dependent on Panasonic, which is working with Toyota and not making batteries for Tesla Shanghai. Here is our take on all the information we have so far: