Morgan Stanley reiterated an Overweight rating on “Top Pick” Tesla (NASDAQ:TSLA) and cut their 12-month price target on the electric auto stock to $345.00 (From $380.00) ahead of the company’s 4Q earnings report, expected to be released on January 24th.
“Global EV momentum is stalling. The market is over-supplied vs. demand.” Wrote analysts at Morgan Stanley in a note.
Negative changes in the global electric vehicle (EV) market significantly affect Tesla and could reasonably result in a short-term negative impact on the stock price.
However, investors should not overlook ongoing advancements in Tesla's other ventures, particularly those related to automobiles. Additionally, there are areas like Optimus, not factored into Morgan Stanley’s price target, but the market might consider.
Analysts anticipate gaining more insights into these aspects during the upcoming 2024 Tesla AI day.
As for Tesla CEO, Elon Musk’s “discomfort” moving the company forward with AI without increased voting power, Tesla is the sole stock in Morgan Stanley’s coverage that is genuinely AI-enabling. Their Overweight thesis and Top Pick status rely heavily on Tesla gaining value as an AI enabler.
Any alteration in the organizational or legal structure that hinders Tesla's involvement in AI development could adversely impact the OW investment thesis. Analysts anticipate this matter will be closely examined during Wednesday's analyst call.
Shares of TSLA are up 0.66% in pre-market trading Monday morning.