Morgan Stanley reiterated an Overweight rating and $200.00 price target on Tesla (NASDAQ:TSLA) after conducting an email survey of institutional investors and industry experts on Friday.
The survey consisted of one question asking survey respondents how they believe Tesla will perform over the next six months, with a multiple-choice answer ranging from “Significantly Outperform” to "Significantly Underperform”.
The survey was distributed at 11:52am EST on Friday, April 21st and received 44 responses by the end of the day.
71% of survey respondents said that they believed the electric vehicle company would underperform.
Morgan Stanley analysts also wrote in a note, “Since earnings were released, we have fielded questions about Tesla's pricing strategy…asking whether we are witnessing a strategic 'masterstroke' or a potential 'blunder' that threatens Tesla's long-term profitability and brand strength. This past Thursday we hosted a bull/bear lunch in NYC. At the start of the launch, we asked the 36 attendees via show of hands who believed Tesla's share price would outperform the stock market over the next 6 months. Not a single hand went up.”
They still see Tesla as the best positioned mass-market auto name in Morgan Stanley’s coverage, but they expect the price cuts to command the investor debate as the market works to understand Tesla's self-started price war. They believe near-term price action can be choppy as a result.
They continued in the note, ”Many clients are asking what this means for Tesla's EV competition, particularly the EV projects of the legacy automakers. In our opinion, between the economic slowdown and the rising threat of Chinese EV export supply...Tesla's latest pricing 'strategy' may be the straw that can force much needed austerity and capital discipline on the legacy OEMs.”
Shares of TSLA are down 3% in afternoon trading on Monday.