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Could Tesla shares Fall to $150 Before the Year Ends?


16 November 2022

Morgan Stanley analysts acknowledged that some customers’ opinion toward the producer of electric vehicles (EVs) is being impacted by Elon Musk’s recent agreement to take Twitter private. Following recent discussions with Tesla investors, the analysts noted that some say they do not wish to have an association with the controversy surrounding Musk and Twitter. This is in line with investor concerns over potential effects on consumer sentiment that could impact Tesla’s business near term.

What Do Experts Predict?

Although Tesla currently has a high degree of self-funding, they mentioned a client note that achieving the growth implied in its current $600 billion market capitalization will require a continued strong relationship with the investment community. Furthermore, the recent price reductions for EVs in China suggest that demand may slow down. According to experts, Tesla may follow up and announce price reductions in Europe when Giga Berlin begins to reach an output of 5k units/week. In contrast, price reductions in the United States may come at the start of the next year.

As a result, the analysts predict that Tesla’s stock price might reach Morgan Stanley’s bear case price objective of $150 per share by year’s end. This would entail a more than 20% decline in the price of Tesla shares from Monday’s closing price, creating a window of opportunity for potential Tesla investors.

The analysts wrote that at our $150 bear case price, Tesla shares would trade at roughly 12.5 times EV/EBITDA and 23 times PE on our FY25 forecast (SBC burdened), which we see as excellent value for a self-funded, 20 to 30% top-line grower in top position to benefit from re-architecting the US on-shore/near-shore/friend shore renewable supply chain at scale. After closing at $190.95 yesterday, Tesla’s stock price is up roughly 1% as of 7:00 ET (12:00 GMT) on Tuesday.

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