Tesla results came in below ‘relatively low’ expectations, says Morgan Stanley

Morgan Stanley says investor expectations for Tesla’s (TSLA) Q3 earnings were “relatively low,” but Tesla’s actual results “came in below consensus expectations for the quarter” as Tesla missed most consensus operating metrics other than stronger ZEV credits. Tesla’s adjusted operating margin excluding ZEV credits came in at 5.3%, which compares with the firm’s Q3 adjusted EBIT margin estimates for General Motors (GM) and Ford (F) of 7.6% and 4.9%, respectively, added the analyst in a note issued ahead of the company’s conference call. The firm, which said after the call “How can we be OW Tesla despite the company’s caution on macro, consumer, Cybertruck and Mexico?” thinks this comes down to where the $5B annual of R&D is going. While the firm maintains its Overweight rating on Tesla shares, it lowered its price target to $380 from $400.