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Tesla (TSLA): Morgan Stanley earns its millions putting TSLA stock between $500-$1000

Morgan Stanley analysts are updating their Tesla (TSLA) stock prediction ahead of earnings and they still justify their multi-million-dollar salaries with a dubious wide $500-$1000 price target range.

In a new note to clients today, Morgan Stanley auto analyst Adam Jonas, one of the most followed Tesla analysts, and his team released some thoughts ahead of Tesla releasing its Q1 2020 earnings:

“We think 1Q can only be so bad and most investors already expect a weak 2Q. This leaves anything on forward demand, China ramp and visibility for production re-start as the real needle-movers in our view. We believe the situation locks the stock in a $500 to $1k range for now.”

Jonas and his team are not new to making broad predictions with a wide range on Tesla’s stock.

Just a few months ago, in December 2019, Morgan Stanley issued a note with an extreme bear case of $10 per share, a base case of $250 per share, and a bull case of $500 per share on Tesla’s stock.

Morgan Stanley has since updated the price target to $440 per share and in the new note today, they say that Tesla’s stock is currently getting ahead of itself:

“While we believe the stock’s run to $725 has gotten ahead of the fundamentals of the business today, we believe positive sentiment around deliveries, cash / liquidity profile, and other miscellaneous items such as battery day, which are much harder to gauge, could allow the stock to test levels near our bull case, which remains $1,200.”

They issued this note before the market opened today and Tesla’s stock surged up to over $780 per share.

Adam Jonas is ranked No. 701 out of 6,495 Analysts on TipRanks with a success rate of 47% and an average return of 6.6%. He recommended to sell Tesla’s stock during the last major run up before switching to an equal weight rating:

Electrek’s Take

I used to think that Jonas and Morgan Stanley were the best analysts when it comes to Tesla’s stock, but I have completely lost faith over the last year.

Their ridiculously wide ranges of predictions show a complete lack of understanding and with their poor analysis of Cybertruck’s potential last year, I can’t get behind their model for Tesla.

I simply don’t understand why these people get paid millions of dollars to deliver that kind of content:

“We believe the situation locks the stock in a $500 to $1k range for now.”

Really? That’s simply a ~30% range each way from the current price. It’s also useless to look at the short term prospect in this current situation with the macroeconomic factors being much bigger concerns than almost anything Tesla could do in the short term at this point.

Disclosure: I am long TSLA.

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Fred is the Editor in Chief and Main Writer at Electrek.

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