Tesla's (TSLA) EBITDA Margin May Be 'Too High' and Could Lead to $20K EV Prices - Morgan Stanley
- Wall Street mints big gains to end strong week
- JP Morgan's Kolanovic Predicts No Recession and Next Week's Rebalancing Could Drive Stocks Up 7%
- U.S. Supreme Court overturns Roe v. Wade, ends constitutional right to abortion
- FedEx (FDX) Gains on Solid FY23 Outlook, Analysts Mostly Bulled Up Into Next Week's Investors Day
- Get Ready for a 10% Rally in S&P 500
News and research before you hear about it on CNBC and others. Claim your 1-week free trial to StreetInsider Premium here.
Morgan Stanley analyst, Adam Jonas reiterated Tesla’s (NASDAQ: TSLA) Overweight rating and a $900 price target after reviewing the company’s 2Q earnings report and explains why the report was "so bearish for the auto industry."
Jonas notes the 21% Adj. EBITDA margin in the quarter may not seem like a big deal, but it is a "very big deal." Jonas reported that the company is producing an EBITDA margin “much closer to the luxury end of the auto market than to the average industry margin.”
The analyst actually thinks Tesla’s EBITDA margin may be “too high” and believes that the company should invest its margin back into price. This would help Tesla to “expand the availability of lower priced Tesla vehicles to as many people as possible.“
Morgan Stanley sees the EV market as a “highly deflationary” business and is prepared for Tesla vehicles to be offered for as low as s $20k/unit by the end of this decade.
Jonas also expects the price of certain EVs across different manufacturers to be as low as $10k. Morgan Stanley believes that OEM profitability will be derived from monetizing the customer via other revenue streams, such as software.
By Michael Elkins | [email protected]
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Mizuho Lowers Unit Estimates and Targets For Tesla, Rivian, and NIO on China Disruption
- Active options: TSLA AAPL AMZN META F NIO AMD NVDA WBD
- Banco Bilbao Vizcaya Argentaria SA (BBVA:SM) (BBVA) PT Raised to EUR7.50 at Goldman Sachs
Create E-mail Alert Related CategoriesAnalyst Comments
Related EntitiesMorgan Stanley, Tesla, Earnings, Michael Elkins
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!