Morgan Stanley Sees Continued Buying Opportunity in Tesla Stock Despite Soft Deliveries

By Senad Karaahmetovic

Tesla’s stock has seen a decline of approximately 10% today, following the release of a Q4 deliveries and production report that fell short of expectations.

In light of this news, several analysts from various firms have revised their estimates and price targets for Tesla, acknowledging the disappointing delivery numbers. Bernstein analysts remarked on Tesla’s increasing struggles, suggesting that the company is "facing a significant demand problem."

Conversely, some analysts offered a more optimistic perspective. Analysts at Vital Knowledge noted that the soft Q4 deliveries "may not be a terrible surprise," considering the circumstances. They highlighted that the fact Tesla achieved a certain delivery level was a "modest positive."

While they do not consider Tesla to be a compelling buy at the moment, they pointed out that the reduced earnings expectations lead them to be more bullish than the broader market consensus.

Morgan Stanley, a long-time supporter of Tesla, maintained an Overweight rating on the stock. They view the recent drop in share price as a potential buying opportunity for investors looking to engage with the global leader in electric vehicles, particularly given its long-term growth potential.

In their notes to clients, Morgan Stanley emphasized that while auto companies face significant challenges in the coming year due to a worsening macroeconomic environment, high levels of unaffordability, and growing competition, Tesla has the potential to enhance its lead in the electric vehicle sector. They believe the company can leverage its cost advantages and operational scale to differentiate itself from its competitors.

As of 10:35 EST, Tesla’s stock is trading at $110.97.