Morgan Stanley analyst Adam Jonas notes that Tesla’s Q1 results featured a "modest miss" on the "clean" auto gross margin and that free cash flow of came in "well below" the firm’s and consensus forecasts, stating that the firm believes the quarter will "further fuel the debate on whether cutting price is the right strategic avenue for Tesla." However, it continues to be positive on the Tesla story, though the firm believes investors will have to be patient on margins, expect volatility in the short to medium term and expect that global price cuts are "not done yet," adding that it would "prepare for an era of consolidation in the EV sector over time." Morgan Stanley has an Overweight rating and $220 price target on Tesla shares.
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