Tesla Stock (NASDAQ:TSLA)
Due to supply chain and additional pressures from FX headwinds, input cost inflation, and starting costs, Morgan Stanley lowered its base case price objective on Overweight-rated Tesla (NASDAQ:TSLA) to $330 from $350. In addition, the company cautioned that if the global economy were to deteriorate, Tesla stock might experience some demand destruction, and China’s profitability could be in danger.
We believe Tesla’s increasingly large size today and in the forecast makes it susceptible to what could be some profound swings in consumer strength and EV affordability,” said updated analyst Adam Jonas. “While initial signs of a slowing consumer present itself in shrinking order-to-delivery times/reduced order backlots.” Long-term TSLA unit volume forecasts of 3.2 million units by 2025 and 7.7 million by 2030 were maintained by Morgan Stanley.
To consider some obstacles, such as scaling two Gigafactories on different continents, Morgan Stanley factored in its automotive gross margin and cash flow for Tesla stock.
Given the additional development options available to the electric car manufacturer and the significance of building up cash reserves to retain a self-financing position across various adverse economic circumstances, the business is not thrilled about share buybacks from Tesla stock, as stated by Jonas.
Despite Morgan Stanley’s warning, the new PT for Tesla stock of $330 still represents a gain of almost 60% from the current price. Morgan Stanley’s price target (PT) for EV stock is $500 in the bull case and $150 in the bear scenario.
At 3:05 PM EST, on a bad day for U.S. corporations with China exposure, Tesla stock was down 1.98%.
Featured Image- Unsplash @ David von Diemar
Author Shariq Khan 
