Morgan Stanley Agrees with Elon Musk that Tesla (TSLA) Stock May Be Ahead of Itself

September 15, 2014 9:28 AM EDT
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Price: $240.08 --0%

Rating Summary:
    27 Buy, 23 Hold, 11 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 8 | Down: 14 | New: 49
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Morgan Stanley analyst Adam Jonas weighed in on Tesla Motors (NASDAQ: TSLA) today, saying the stock may be up for the wrong reasons.

Jonas commented, "Recently when asked about Tesla's stock, Elon Musk admitted he felt the share price was a bit ahead of itself. We agree. We believe the shares are worth $320, but perhaps not so quickly and not for some of the reasons we believe are driving the market."

He added, "We are big believers in Tesla's strategy and stand firmly by our claim that it is the world's most important car company. Securing key gigafactory partners (both public and private) and upcoming Model X details provide an excellent runway for the story. These are genuinely historic times for the auto industry and Tesla is writing its own chapters at a furious pace. But we do not expect the stock to appreciate so consistently and one-directionally from here." He listed four sobering facts for investors to consider:

1. EVs are failing categorically on a global scale

2. China demand growth may be severely limited by Tesla's ability to develop the supporting dealer and service infrastructure

3. Democratization of EVs is going too far, as it requires breakthroughs that may be too unreasonable to take for granted as a base case.

4. In an autonomous world, why will people buy a Tesla?

Overweight price target of $320.00

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

Shares of Tesla Motors closed at $279.20 yesterday.

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