Morgan Stanley (Morgan Stanley) analyst Adam Jonas, who has always been bullish on Tesla (TSLA-US), has now turned conservative, arguing that Tesla may not be able to escape the impact of consumer spending.
In a report released on Monday (24th), Jonas lowered his price target on Tesla to $330 from $350, but reiterated his rating on the stock as “overweight”, which is the second time he has lowered his target this month. price.
Jonas said that Tesla’s third-quarter earnings report was stronger than market expectations, and it did not impact earnings performance due to issues such as rising costs. However, given the current economic environment, he believes there should be room for unexpected headwinds.
“We want to have a large margin of safety on concerns such as supply chain, foreign exchange headwinds, input cost inflation, cost of new creation and demand destruction,” Jonas said.
Jonas also said that while he has many customers who believe Tesla has a unique position in the electric vehicle market and is generally under-supplied, Tesla is less vulnerable to a consumer slowdown. However, he believes that Tesla, which is growing in size today, remains vulnerable to slowing consumer spending and high EV prices.
Tesla announced yesterday that it will cut the price of Teslas sold in China by up to 9%. According to Jonas, this suggests that the world’s largest auto market is now facing weak demand.
“We estimate that half of Tesla’s net profit comes from the Chinese market, and perhaps Tesla can be regarded as a derivative of Chinese technology stocks. Looking forward to 2030, Tesla is expected to gradually reduce its dependence on China, but the transformation of the business mix will take time. ” Jonas said.