7 Reasons Morgan Stanley isn't Upgrading Tesla (TSLA)

Morgan Stanley analyst Adam Jonas reiterated an Equalweight rating and $680.00 price target on Tesla (NASDAQ: TSLA) noting that Tesla’s current Enterprise Value (market cap + net industrial debt) is $155bn, nearly 40% higher than Toyota. Sentiment remains bullish and the analyst believes TSLA has the balance sheet to sustain it through the downturn but he offered 7 reasons he isn't ready to upgrade:

1) Elon Musk’s goal reaching 10 million units of vehicle volume supported by ‘terawatt’ scale battery factories requires greater levels of spending than the $66bn of aggregate capex the company is projected to spend through 2030.

2) Ongoing China relations risk

3) 2Q Will Be Ugly. The analyst is forecasting a 2Q delivery drop of 13% Q/Q (19% Y/Y) and free cash burn of $2.7bn.

4) Possible competition from AMZN/Rivian and state-supported OEMs.

5) Freemont will face union risk

6) With Tesla’s stock is trading at 13x projected 2025 EV/EBITDA there are likely better ways to invest in Tech

7) There are better ways to invest in EV/Batteries.

For an analyst ratings summary and ratings history on Tesla click here. For more ratings news on Tesla click here.

Shares of Tesla closed at $819.00 yesterday.

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