Morgan Stanley holds Tuya stock Overweight with $4.20 target

Published 12/05/2025, 12:04
Morgan Stanley holds Tuya stock Overweight with $4.20 target

On Monday, Morgan Stanley (NYSE:MS) maintained its Overweight rating on Tuya Inc (NYSE:TUYA) with a consistent price target of $4.20. The firm’s analysts project an upward trajectory for the company’s shares over the next 15 days, anticipating a favorable market response to recent developments in China-US tariff negotiations. According to InvestingPro data, analyst consensus is strongly bullish, with price targets ranging from $3.00 to $5.30, suggesting significant upside potential from the current price of $2.32. Tuya’s stock has experienced a 24% decline since April 2, 2025, a contrast to the MSCI China Index’s marginal 1% decrease within the same period. This performance is partly attributed to the impact of global tariffs, given Tuya’s significant consumer base in the US, which accounts for approximately 17% of its end-consumer exposure. Despite recent volatility, InvestingPro analysis shows strong fundamentals, with impressive revenue growth of nearly 30% and an overall Financial Health score rated as "GREAT". For deeper insights into Tuya’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

Tuya, recognized for its contribution to the high-value add Internet of Things (IoT) sector, which typically involves discretionary consumer spending, faces potential risks associated with a global recession. These risks could be exacerbated by the ongoing tariff disputes, which have the potential to affect economies worldwide. Nevertheless, Morgan Stanley expresses confidence that the positive momentum in tariff talks could substantially alleviate investor apprehensions regarding Tuya’s prospects.

The analysts at Morgan Stanley have assigned a subjective estimate, indicating an 80% or higher probability that the optimistic scenario for Tuya will materialize. This estimation reflects their assessment of the likelihood of a favorable outcome from the tariff negotiations, which they believe would positively influence Tuya’s market valuation. The firm’s stance is based on the premise that easing tariff tensions would be beneficial for Tuya and its stakeholders, improving the company’s position in the global market. Based on InvestingPro’s Fair Value analysis, Tuya appears undervalued at current levels, with strong financial metrics including a healthy current ratio of 9.57 and zero debt on its balance sheet.

In other recent news, Tuya Inc. has announced its unaudited financial results for the fourth quarter ending December 31, 2024, along with preliminary annual results. The company also declared a dividend, although the specifics regarding the amount and payment date were not disclosed. These financial disclosures are part of Tuya’s compliance with reporting standards and are detailed in their filings with the United States Securities and Exchange Commission. In addition, Morgan Stanley has increased its price target for Tuya Inc. to $4.20 from $3.00, maintaining an Overweight rating. The adjustment reflects confidence in Tuya’s growth potential and financial prospects, highlighting expectations of rapid revenue growth and margin expansion. Furthermore, Tuya Inc. has scheduled a board meeting and set the record date for its upcoming annual general meeting, as disclosed in a recent SEC filing. These corporate governance activities are routine but crucial for shareholders, who will have the opportunity to engage with the company’s leadership. Investors can access the exhibits attached to the Form 6-K for more detailed information on these developments.

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