The ambitious projection of the price target issued on Tesla stock by Morgan Stanley is based on the trust in the company’s innovative technology.
Morgan Stanley (NYSE: MS) analyst Adam Jonas has revised his price target for Tesla Inc (NASDAQ: TSLA) from the earlier $540 to a record high of $810 per share. According to TeslaRati, Morgan Stanley maintained its “Overweight” rating on the already highly valued Tesla stock while giving the electric car maker a bull case estimate of $1,232.
At the time of writing, Tesla (TSLA) stock is up 3.04% in the pre-market, trading at $757.45.
The highly bullish price target from Adam Jonas is best appreciated when compared with the industry’s average of $437.15, according to FactSet and the $810 price target is currently about 10% higher than the current close of the Tesla shares at $735.11. The revised price target corresponds to a pre-split price of $4,050 per share.
“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,” Jonas noted.
The revised price target comes following the released report of Tesla’s car production and delivery for the 2020 fiscal year. As reported by CNBC, Tesla produced a total of 179,757 cars in the fourth quarter and delivered a record 180,570 electric vehicles in the same quarter, beating its previous record as well as Wall Street expectations. For the entire year, the company delivered a total of 498,000 vehicles, almost hitting its projected estimate.
Morgan Stanley Trust Tesla Innovations to Pull the Price Target
The ambitious projection of the price target issued on Tesla stock by Morgan Stanley is based on the trust in the company’s innovative technology. The analyst also noted that competing firms are not so much around. He said:
“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.”
Besides the price target for the Tesla shares, Morgan Stanley also gives a projected production volume of 5.2 million car units for the company by 2030, a modest forecast compared to the 20 million projected price forecast the company announced through its CEO Elon Musk on its last Battery Day.
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