Institutional Investors and Industry Experts See Traditional Car Companies as a Bigger Risk to Tesla (TSLA) then 'Big Tech' - Morgan Stanley Survey

March 17, 2021 8:28 AM EDT
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The latest survey from Morgan Stanley shows that institutional investors and industry experts see legacy original equipment manufacturers (OEMs), such as GM (NYSE: GM), Ford (NYSE: F), Volkswagen (OTC: VWAGY), BMW (OTC: BMWYY), and others, as a bigger competitive risk to Tesla (NASDAQ: TSLA) than the Big Tech.

According to Morgan Stanley analyst Adam Jonas, two-thirds of survey responses chose “Legacy OEMs” as a bigger competitive threat to Tesla, while 34% chose “Big Tech.”

The second survey question asked: “On a scale of 1 to 5, how big do you see the risk of a serious EV battery cell supply shortage over the next 3 years? (1 least concern, 5 highest concern).”

Results show an average value of 3.0, indicating a rather even distribution.

Jonas rates TSLA with an “Overweight” rating with a price target of $880.00 per share. The analyst upgraded the stock to the equivalent of Buy in November last year.

“Tesla is on the verge of a profound [business] model shift. For the first time, we are adding software [and] connected vehicle services revenue to our earnings forecast and base-case valuation,” he wrote in a note.

“To only value Tesla on car sales alone ignores the multiple businesses embedded within the company,” he added.

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