As we reported earlier today, Tesla Model 3 production seems to have finally picked up again after a 4-day stoppage to update the lines. The company is now registering more VINs as it works toward its production goals.

The market is certainly liking it with an almost 4% jump in Tesla’s (TSLA) stock price this morning, but Morgan Stanley suggests caution to investors and sees a profit taking opportunity as Tesla increases Model 3 production.

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Morgan Stanley analyst Adam Jonas, who has long been a supporter of Tesla has recently been cooling down his optimism on the stock’s prospects. In a note to clients last week, he said that Tesla achieving its Model 3 delivery milestones is an opportunity for investors to “exit the stock.”

He wrote:

“We expect that Tesla will successfully overcome bottlenecks and ramp Model 3 production throughout 2018. The boost to cash flow and sentiment provides a selling opportunity before facing further headwinds.”

As previously mentioned, today’s news confirms that Tesla is working through those bottlenecks, which would fit into Jonas’ outlook for the profit taking opportunity.

The “headwinds” that he is referencing include competition, specifically from Amazon and Waymo, and issues in China.

Last week, we reported on Tesla CEO Elon Musk taking Donald Trump to task on US-China car trade. The effort came after Tesla failed to secure a wholly owned factory in China and now Jonas expects that it will lead to the automaker facing “significant challenges” in the country.

As for competition, Waymo is obvious since Jonas has long been promoting the idea of “transportation as a service” with fleets of self-driving electric vehicles, but he is now adding Amazon into the mix as a potential Tesla competitor.

He wrote about Amazon:

“Amazon has a vested interest in taking the marginal cost of transportation to its lowest possible level. Look no further than AMZN’s “fulfillment” and “shipping” expense line items in its income statement. In aggregate, fulfillment and shipping was $46bn in 2017, and Morgan Stanley Internet Analyst Brian Nowak expects it to reach $64bn in 2018 and $291bn by 2027. We’re in no position to say whether AMZN would be a partner or a potential competitor to Tesla in the area of transport, trucking, and logistics, but we point out the scale that large e-commerce players can bring, which could lead to surprisingly deflationary long-term trends in some of Tesla’s core initiatives.”

The analyst maintains his “equal-weight” rating on the stock with a price target of $379.

Adam Jonas is ranked #650 out of 4,788 analysts on Tip Ranks with a 51% success rate and an average return of 11.1%. Here’s his track record on Tesla’s stock:

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