With his price forecast of only $ 10 at worst for Tesla stock, analyst Adam Jonas from Morgan Stanley caused outrage among some fans in spring 2019. The low number was just the bottom of his Tesla worst-case forecast, and his mid-range target was above the stock’s price at the time. In the meantime, the $ 230 has been exceeded many times, and Jonas has adjusted his goal several times. He did that again now – he sees Tesla rising to $ 2500, but still stayed with a sell recommendation overall.
3 million Teslas a year in 2030
This was reported on Wednesday by the finance site Marketwatch. For the first time in ten years of dealing with the stock, he now sees Tesla as a “very, very large car manufacturer”, according to the new study by Jonas. It is now “obvious” that Tesla will be one of the largest in the world. So far, the analyst had expected the electric car specialist to deliver 2.3 million units in 2030. Now there are 3 million, with margins and sales prices twice as high as the industry average.
According to Marketwatch, Jonas’s lower price target is now $ 375 (he had previously raised it well above the $ 10 in May 2019 in several steps, most recently to $ 281 earlier this month). He increased the best case forecast from the last $ 2,000 to $ 2,500, which would be about two thirds above the current Tesla price of around $ 1,500. The weighted average for Jonas is $ 1050, about a third less than the current one. Therefore, his recommendation for the Tesla share is to continue selling.
Three hurdles for Tesla’s best case
Because just to justify the current valuation, Tesla would have to sell 5 million of its electric cars in 2030 according to the analyst’s calculations. That would then make up 10 percent of all sales in the entire auto industry and 20-30 percent of their profits, according to Jonas. His optimistic bull scenario could only be justified if Tesla developed better than expected in three aspects: Business should not become too dependent on China, competing electric cars would have to remain relatively unattractive, and the announcements from Tesla boss Elon Musk would autonomous driving should prove realistic.