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On Wednesday, Morgan Stanley (NYSE:MS) reiterated its Overweight rating and $430.00 price target for Tesla stock (NASDAQ:TSLA), representing significant upside potential from the current price of $247.99. According to InvestingPro data, the stock has experienced a challenging year, with a -42.9% YTD return, though it maintains its position as a market leader with an $803 billion market capitalization. The firm’s latest investor survey revealed concerns among respondents regarding the impact of CEO Elon Musk’s political activities on Tesla’s business fundamentals, with 85% believing it to be negative or extremely negative. Despite these concerns, InvestingPro analysis shows Tesla maintains strong financial health with a favorable current ratio of 2.02 and more cash than debt on its balance sheet. Additionally, the survey, which collected 245 responses over a period of 17 hours, indicated that 59% of respondents anticipate a year-over-year decline in Tesla’s fiscal year 2025 deliveries. Only 19% expect an increase, while 23% foresee stable delivery numbers compared to the previous year. A notable 21% of respondents predict a decrease in deliveries by more than 10% year-over-year.
The survey results contrast sharply with the more bullish sentiment expressed during a Tesla Bull Bear lunch in January, where the outlook for full-year growth was significantly more optimistic. Despite the pessimistic view on Tesla’s business prospects, investors appear to be divided on the stock’s direction by the end of the year, with 45% predicting an increase and 36% expecting a decrease from current levels.
Morgan Stanley’s communication emphasized that the survey’s participants were selected from their distribution list and do not represent a random or comprehensive sample of investors. It is also important to note that not all respondents are Tesla shareholders. The survey was conducted on March 11th, beginning at 3:15 pm, and the results were compiled after 17 hours of collecting feedback.
This recent investor sentiment comes at a time when the electric vehicle industry is facing various challenges, including supply chain issues and increasing competition. Tesla, as a leading player in this market, often finds its stock price sensitive to both company-specific and industry-wide developments.
The firm’s reiteration of the Overweight rating and price target suggests that despite the mixed investor sentiment and potential headwinds, Morgan Stanley remains confident in Tesla’s long-term value proposition and market position.
In other recent news, Tesla has announced plans to double its vehicle production in the United States over the next two years, as stated by CEO Elon Musk during a joint appearance with President Donald Trump. This development comes amid ongoing "Tesla Takedown" protests and challenges faced by the company. On the financial front, Tesla’s recent earnings projections have been adjusted by several analyst firms. Guggenheim Securities has cut its price target for Tesla to $170, maintaining a Sell rating, citing lower first-quarter delivery forecasts and gross margins. Evercore ISI has also reduced its price target to $235, maintaining an In Line rating, due to concerns over brand erosion and skepticism about Tesla’s autonomous vehicle technology. Wolfe Research continues to hold a Peerperform rating for Tesla, emphasizing the importance of advancements in AI and Full Self-Driving capabilities for future growth. Despite these challenges, there is excitement about Tesla’s potential Robotaxi service, which could generate significant revenue by 2035, according to Wolfe Research.
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