Morgan Stanley lifts target price on Tesla (TSLA) to $810, bull case of $1,232 per share

Morgan Stanley recently gave Tesla (NASDAQ:TSLA) a positive outlook, with analyst Adam Jonas raising his price goal to a street high of $810 per share, up from his previous estimate of $540 per share. The investment bank and financial services company also retained its “Overweight” rating on TSLA stock, while giving the electric car manufacturer a $1,232 bull case valuation.

Jonas’ updated Tesla estimates have put him among the bulls of the market, particularly as his price target of $810 is about 10 percent above where TSLA stock closed on Tuesday. In addition, according to FactSet, the average street forecast for Tesla shares currently stands at $437.15.

“While the range of outcomes is admittedly high, the market has ‘chosen’ to ascribe a higher level of discounted value to Tesla than that typically discounted for its peers. Despite the extraordinary run in the share price, we continue to believe that Tesla can outperform vs. our sector in 2021. In our opinion, Tesla is still the best-positioned company in EVs and AVs under our coverage due to its people, its technology, business model, and access to capital. 

“Furthermore, it is important to note that the company has no entanglement with the environmental liabilities that burden its legacy competition. Put it all together and we believe Tesla’s business model can unlock recurring mobility services revenue faster and more profitably than the competition. We struggle to find a more innovative company with the ability to execute against the high degree of difficulty inherent in sustainable transportation and energy at scale. We reckon it’s a rather short list,” Jonas noted, as per StreetInsider.

The analyst also increased his volume projections for 2030 to 5.2 million units, a 27 percent improvement from his previous 3.8 million units forecast. Though positive, according to Tesla’s own projections, this is still conservative. On Battery Day, Elon Musk noted that Tesla will seek to manufacture 20 million vehicles annually before 2030.

The latest upgrade of Morgan Stanley comes on the heels of Tesla’s Q4 2020 vehicle manufacturing and distribution report, which reported that in 2020 the company managed to manufacture and hand over half a million vehicles. This was amid a year marked by a pandemic in 2020 that dealt heavy blows to the automotive industry.

Once final results are in, Analysts from many research firms currently expect vehicle sales in the US to total 14.4-14.6 million in 2020, as reported in a survey from The Wall Street Journal. That is a fall of 15 percent from the previous year and the lowest since at least 2012.

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