Stock Analysis & Ideas

Despite Twitter Distraction, Keep on Buying Tesla Stock, Says Morgan Stanley

Do you think Tesla’s (TSLA) share price drop is correlated to Elon Musk’s Twitter endeavors? Most likely, the answer is yes, and if that is your reply, then it chimes well with those given in response to a recent Morgan Stanley survey.

Firm analyst Adam Jonas says the banking giant asked a host of institutional investors and industry experts two questions: “1. How much of Tesla’s recent underperformance do you attribute to the Twitter situation? And 2. What impact do you believe Elon Musk’s acquisition of Twitter will have on Tesla’s business going forward?”

For the former, almost 75% of respondents said they believe the Twitter situation has accounted for “at least a significant portion of Tesla’s recent share price underperformance.”

As for the latter question, ~65% seemed to think the Twitter acquisition will have a “negative or slightly negative impact on Tesla’s business going forward.” Just 5% said they thought the Twitter acquisition will have a “positive impact” on Tesla’s business.

As for Jonas, he thinks the Musk-Twitter love affair could be detrimental to Tesla in a few ways, such as consumer sentiment/demand, commercial partnerships, and the support of government and capital markets.

Yet, despite the ongoing Twitter debacle, Jonas is recommending investors load up on shares and he lists the reasons why he remains in the EV leader’s corner.

“Tesla is the only name we cover that generates a profit (before incentives) on the sale of EVs. Tesla is the only self-funding pure play EV name we cover and has achieved a unique position to secure supply of the battery metals and related up-stream supply necessary to produce EVs at multi-million-unit scale,” Jonas explained. “In a slowing economic environment, we believe Tesla’s ‘gap to competition’ can potentially widen, particularly as EV prices pivot from inflationary to deflationary.”

To this end, the Morgan Stanley analyst gives TSLA shares an Overweight (i.e., Buy) rating, backed by $330 price target. The figure suggests the shares have room for 75% growth from current levels. (To watch Jonas’s track record, click here)

Overall, the stock claims a Moderate Buy consensus rating, based on 18 Buy ratings, 8 Holds and 2 Sells. (See Tesla stock forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Tired of arriving late to the Big Returns Party?​
Most investors don’t have major gainers like TSLA or NVDA on their radar from the start.
The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype.
​​For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate.​
Learn More