Tesla nasdaq Tsla Grapples with Margin Fears As Morgan Stanley Analyst Turns Bearish

Tesla (NASDAQ: TSLA) Grapples with Margin Fears as Morgan Stanley Analyst Turns Bearish

Shares of Tesla (NASDAQ: TSLA) fell nearly 2% on Monday following a bearish move by a Morgan Stanley analyst who opted to lower the price target for TSLA stock. This decision coincides with Tesla’s ongoing strategy of reducing vehicle prices, contributing to concerns about potential margin pressures for the electric vehicle (EV) giant.

On Monday, Analyst Adam Jonas from Morgan Stanley lowered his price target for TSLA to $345, down from $380, while maintaining an overweight rating on the shares. Jonas, a consistent supporter of Tesla, anticipates a modest 2024 sales and financial performance from Tesla when it discloses fourth-quarter earnings later this week.

Jonas said,

“Global EV momentum is stalling. The market is oversupplied vs. demand.”

Jonas provided an overview of various indicators illustrating the expansion of the electric vehicle (EV) supply alongside a deceleration in demand. Notable instances include Tesla’s ongoing approach of providing discounts and reducing prices at the beginning of 2024 and Hertz (HTZ) revealing on January 11th its decision to sell approximately one-third of its EV fleet.

He further added, 

“Negative developments in the global EV market very much matter to Tesla and should reasonably have a negative near-term impact on the price of the stock.”

Jonas values the fundamental automotive segment of Tesla at $75 per share, representing approximately 22% of the $345 price target.

Tesla (NASDAQ: TSLA) also initiated the deployment of FSD Beta Version 12 to a subset of paying customers on the evening of Sunday.

TSLA stock was down 1.60% in the afternoon trading on Monday, with a trading volume of 116,732,749 (116.73 million). This volume slightly lags behind the company’s daily average trading volume of 117.40 million shares.