Tesla (NASDAQ: TSLA) and other electric vehicle (EV) stocks have experienced recent declines in the stock market, leading some analysts to consider them undervalued. Morgan Stanley’s Adam Jonas, a Tesla bull, maintains an optimistic outlook, reiterating a buy recommendation with a target price of $345 per share in mid-February.
Despite acknowledging the prevailing bearish sentiment on the EV sector, Jonas and his team argue that investors may have a limited perspective on Tesla’s business. They believe that Tesla is not just an auto stock but also an energy, AI/robotics company. For instance, Tesla’s development of Optimus, described as a “general purpose, bi-pedal, humanoid robot,” reflects the company’s expansion into AI and robotics.
The analysts at Morgan Stanley emphasize that their valuation of Tesla’s core auto business ($75/share) accounts for only 22% of their $345 price target. They view the current weakness in the EV market as a short-term challenge for Tesla’s stock price.
While Jonas and his team have been longstanding Tesla bulls, they have tempered their expectations in light of challenges in the EV market, reducing the bank’s price target from $380 to the current level in January. Concerns include oversupply in the EV market and a perceived decline in consumer enthusiasm for electric vehicles.
The author of the article expresses a more cautious stance, citing the apparent end of the consumer rush into EVs, Tesla’s ongoing price cuts to boost volume, and safety concerns related to accidents involving Tesla’s Autopilot feature.
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