Overreacted! Morgan Stanley goes against the trend and is bullish on Tesla, with the stock price expected to rise by 75%.
Tesla's stock price plummet has led analysts to believe that it is undervalued. Morgan Stanley reiterated its "overweight" rating on Tesla and predicted that its stock price could rise by nearly 75%. Morgan Stanley believes that Tesla is not just a car company, but also an energy, artificial intelligence/robotics company, and will benefit from advances in artificial intelligence and other technology fields. However, some analysts are cautious about their optimism towards Tesla, believing that consumer enthusiasm for electric vehicles has waned. Tesla's stock price has fallen by nearly 23% so far this year.
Zhitong App has learned that Tesla (TSLA.US) and other electric vehicle stocks have recently plummeted, leading some analysts to believe that they are undervalued. Morgan Stanley analyst Adam Jonas even believes that Tesla's stock price could accelerate by nearly 75%. He reiterated a "buy" rating on Tesla in mid-February with a target price of $345.
Jonas and his team acknowledge that the market generally has a bearish view on this leading company in the electric vehicle industry. However, they believe that many investors have a narrow view of the company's business.
In their view, Tesla will also benefit from advances in artificial intelligence (AI) and other popular technology fields. For example, the company is developing Optimus, described as "a general-purpose, bipedal humanoid robot capable of performing unsafe, repetitive, or boring tasks."
The Morgan Stanley analysts stated: "Our view of Tesla is that it is both a car company and an energy, artificial intelligence/robotics company. In fact, our valuation of its core automotive business ($75 per share) is only 22% of the $345 target price."
They believe that although the current weakness in the electric vehicle market is unfavorable for manufacturers like Tesla, the negative impact on the stock price will be short-term.
It is understood 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 the stock's target price from $380 to the current level due to oversupply in the electric vehicle market.
However, The Motley Fool analyst Eric Volkman does not agree with Jonas's optimistic view of Tesla. Volkman believes that the consumer enthusiasm for electric vehicles seems to have waned, while the company continues to lower prices to boost sales. Volkman also holds a pessimistic view of Tesla's Autopilot system, suggesting that the system seems to require more development and testing.
Tesla's stock price has fallen by nearly 23% so far this year.