Tesla saw its stock (TSLA) rise this morning after falling back from new highs last month. The jump is attributed to Morgan Stanley raising its price target on the automaker’s stock after analyzing its EV infrastructure, which the firm sees as an advantage over other electric vehicle makers.
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In a new note issued to clients today, Morgan Stanley analyst Adam Jonas increased his price target for Tesla from $317.00 to $379.00.
Tesla’s stock currently trades at $348 per share.
He cited Tesla’s infrastructure as a “key differentiator”:
“Tesla targets 10k superchargers globally by the end of 2017 (6,246 as of Aug 17), and we estimate that there will be 15k destination chargers by the end of the year. Throw in Tesla’s 149 wholly-owned-and-operated service centers, 301 stores and galleries globally and the world’s largest battery factory (Gigafactory 1 in Reno), and we estimate that Tesla has allocated nearly $8bn to the infrastructure of manufacturing, servicing and charging its vehicle fleet.”
The analyst estimates that “Tesla has made the biggest proprietary investment in superchargers and destination chargers globally” – something that is very hard to argue since virtually all other automakers rely on third-party charging networks.
While the new analysis of Tesla’s infrastructure is seen as a plus for the company, Jonas also has to adjust his estimates based on Tesla’s Model 3 production ramp.
Even though the company delivered fewer than anticipated Model 3 vehicles during the last quarter, Jonas has long been factoring no Model 3 delivery in 2017 into his Tesla valuation models. Regardless, the short-term delivery results are dwarfed by the mid- and long-term potential.
He has been modifying his valuation model based on those results and targets. Recently, Jonas released a new analysis predicting that Tesla’s global fleet will reach half a million cars next year and 10 million cars within a decade.
Adam Jonas is ranked #549 out of 4,693 analysts on Tip Ranks with a 53% success rate and an average return of 12%. Here’s his track record on Tesla’s stock: