Morgan Stanley's Tesla (TSLA) Twitter survey shows investors are concerned

November 28, 2022 5:00 PM EST
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Morgan Stanley reiterated an Overweight rating on Tesla (NASDAQ: TSLA) after conducting an investor survey concerning CEO Elon Musk’s involvement with Twitter. According to analyst Adam Jonas, the result of the survey reinforces Morgan Stanley’s views that Musk’s handling of Twitter has contributed to negative sentiment momentum in Tesla shares and could drive some degree of adverse downside skew to Tesla fundamentals. Jonas sees the potential downside as a window of buying opportunity.

The survey was conducted via email and was distributed to a list of institutional investors and industry experts. The survey was two multiple choice questions: “How much of Tesla’s recent underperformance do you attribute to the Twitter situation?” and “What impact do you believe Elon Musk's acquisition of Twitter will have on Tesla's business going forward?”

The survey was distributed at 8:16am EST on Wednesday, Nov 23rd and received 43 responses.

The results showed that a large majority of respondents believe the Twitter situation has accounted for a significant portion of Tesla's recent share price underperformance. About 65% of the respondents feel that the Twitter acquisition will have negative or slightly negative impact on Tesla's business going forward. Around 5% of the responses expect a positive impact from the Twitter acquisition on Tesla's business going forward.

Jonas wrote in a note following the survey “Tesla is the only name we cover that generates a profit (before incentives) on the sale of EVs. Tesla is the only self-funding pure play EV name we cover and has achieved a unique position to secure supply of the battery metals and related up-stream supply necessary to produce EVs at multi-million-unit scale. In a slowing economic environment, we believe Tesla’s 'gap to competition’ can potentially widen, particularly as EV prices pivot from inflationary to deflationary. The current price offers approximately 80% potential upside to our $330 price target which is the highest upside to target we have seen from Tesla in over 5 years.”

Shares of TSLA closed at $182.92 (up 0.03%) on Monday

By Michael Elkins | [email protected]

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