Tesla (TSLA) Packed 5 Years of Performance into 5 Months, Morgan Stanley Sees 5 Things to Drive Shares From Here
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Morgan Stanley analyst Adam Jonas reiterated an Overweight rating and $900.00 price target on Tesla (NASDAQ: TSLA) after taking a close look at the company and determining that shares experienced a classic ‘blow-off-top’ in the second half of 2020 and essentially packed 5 years of performance into 5 months. This year, shares have significantly underperformed both the broader market, broader technology and automotive peers. The Plaid unveiling was fun but the analyst sees 5 things that can move the stock forward from here:
1) Capacity expansion, primarily outside of China with the opening of Berlin and Austin giving Tesla an opportunity to introduce unit economics that should be significantly superior to Fremont's.
2) Model expansion. Tesla achieves most of its nearly 1 million unit run-rate with essentially 2 models, the 3 and the Y.
3) Battery manufacturing expansion/including 3rd party supply to other OEMs.
4) Expansion of ‘service’ offerings to a broader range of its vehicles including via subscription.
5) Insurance. The analyst believes that Tesla’s entrance into the P&C insurance market will serve as an important ‘signal’ to investors as to the potential for auto companies to monetize its connected car real estate.
Shares of Tesla closed at $617.69 yesterday.
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