© Reuters Tesla (TSLA) Estimates, price target cut at Morgan Stanley
By Sam Boughedda
Tesla’s (NASDAQ:) price target was lowered to $1,200 per share from $1,300 by Morgan Stanley analyst and Tesla bull Adam Jonas on Wednesday.
Jonas said the company’s second-quarter unit estimate was reduced to 270,000 units from the previous 316,000 units, bringing its FY22 volume forecast to 1.390mm from 1.425mm previously.
“We are marking to market our lower 2Q volume forecast (latest data, China), with most of the shortfall being offset by 2H volume and higher prices. Target drops to $1,200 (vs. 1 $300) almost entirely due to the increase in WACC to 9% from 8.5% previously,” Jonas said.
Jonas added that with their volume estimates, they allowed for a “minimum upside” given Tesla’s “historic ability to significantly increase production/sales in the latter weeks of any given quarter.”
“According to data from EV-Volumes, since 2019 in the 3rd month of a given Q, TSLA’s sales ranged from 47% to 69% of its quarterly sales. This continued into 1Q22 where March sales accounted for 58% of sales in the With TSLA 2Q sales estimated at around 100,000 units through May (EV-Volumes), we believe TSLA will flex its manufacturing prowess, aided by the accelerating ramp-up. ‘Austin and Berlin, and delivering approximately 170-175,000 units in June, slightly below the approximately 180,000 units delivered on March 22.’
The analyst maintained an overweight rating on the stock, adding that he would buy Tesla weakness on a potentially weak 2Q print.