Morgan Stanley keeps Tesla with an “outperform” rating

Morgan Stanley keeps Tesla with an “outperform” rating

On Wednesday, Morgan Stanley (NYSE:MS) maintained its Overweight rating on Tesla Inc (NASDAQ:TSLA) shares, with a steady price target of $320.00. The firm’s forecast for Tesla’s first-quarter deliveries was adjusted to 425,000 vehicles, marking a modest year-over-year growth of 0.6%. This revision reflects the latest market insights, including data from China and EV Volumes, as the market anticipates Tesla’s official delivery announcement, expected on April 1st.

The adjustment in delivery estimates represents a decrease from the previous forecast of 469,400 vehicles. Additionally, Morgan Stanley revised its full-year 2024 delivery projections for Tesla down to 1,954,000 units from the earlier estimate of 1,998,000 units, equating to an 8.1% year-over-year growth. These changes come as Tesla recently publicized price hikes set to take effect on April 1.

In terms of pricing, Morgan Stanley anticipates a smaller decline in Tesla’s average transaction price (ATP) for the fiscal year 2024. The new estimate sets the ATP at $42,500, which is a 4.6% decrease year-over-year, compared to the former projection of a 5.5% drop to $42,100. The updated figures take into account Tesla’s strategic moves, including the aforementioned price increases and cost-cutting actions to balance financial outcomes.

Tesla’s stock performance continues to be a point of interest for investors, especially in light of the upcoming delivery report and the company’s pricing strategy adjustments. The consistency of Morgan Stanley’s price target suggests confidence in the electric vehicle manufacturer’s market position and its ability to navigate the dynamic automotive landscape.

InvestingPro Insights

As Tesla Inc (NASDAQ:TSLA) gears up for its first-quarter delivery announcement, investors are closely monitoring the company’s financial health and stock performance. According to InvestingPro data, Tesla holds a market cap of $574.92 billion, with a P/E ratio of 38.12, reflecting a high earnings multiple which indicates investor confidence in its future growth despite a high valuation. The company’s revenue for the last twelve months as of Q1 2023 stands at $96.77 billion, showcasing a significant 18.8% growth. This growth is a testament to Tesla’s strong market presence and its ability to increase sales even amid price adjustments and competitive pressures.

InvestingPro Tips highlight that Tesla is a prominent player in the Automobiles industry and holds more cash than debt, providing it with financial flexibility. Despite some analysts revising their earnings downwards for the upcoming period, the company’s liquid assets exceed short-term obligations, indicating a stable short-term financial position.

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