Morgan Stanley has downgraded an American electric vehicle and clean energy company Tesla to underweight from equal-weight amid China risks, Morgan Stanley’s $650 price target, trimmed from $680, suggests about 33% downside.
Morgan Stanley analyst Adam Jonas downgraded Tesla (NASDAQ: TSLA) from Equalweight to Underweight with a price target of $650.00 (from $680.00).
Goldman Sachs analysts downgraded Tesla Inc. after the stock overshot their price target and bumped General Motors Co. up to a buy on a brighter outlook for global auto sales.
While Goldman analysts led by Mark Delaney remain positive on Tesla for the long term, recent price cuts and production challenges with the new Model Y crossover cloud the electric-car maker’s intermediate outlook.
Morgan Stanley analyst comments “We’re Underweight due to our concerns around China, competition, capital needs and near term demand. The RR skew for TSLA is consistent with an Underweight rating.”
“Among the many risks facing Tesla at this time, we would rank risks related to U.S.-China relations at the very top,” Jonas wrote in a note to clients.
“Many investors we speak with describe Tesla as the ‘Amazon of Autos.’ But we’re asking: What if Amazon is the Amazon of Autos?,” Jonas wrote.
The Morgan Stanley analyst said that among the risks to his latest call on Tesla, he may be underestimating the company’s longer-term China growth prospects. Separately, revenue from the company’s “internet of cars” network could drive better-than-expected margins, he added.
Tesla shares traded at price 972.84 USD -5.09% at 12 Jun, 7:05 am GMT-4