Tesla (TSLA) Stock at $850, Morgan Stanley Raises Bull Case to $1,200

Since the start of the year, the Tesla (TSLA) stock has been rising continuously, even earning Elon Musk billions within hours. Tesla Inc.’s potential of becoming a major battery supplier for electric vehicles has made Morgan Stanley, a bearish analyst on the carmaker, almost to double his bull case for the TSLA shares.

Morgan Stanley’s Adam Jonas reportedly increased his highest and most optimistic projection for Tesla to $1,200 per share. Earlier this figure was around $650. The forecast is almost 50% above the company’s closing price on February 14. If the shares surge to those levels, it will give Tesla a market capitalization of about $220 billion.

At the time of writing, Tesla (TSLA) stock is reading at around $853.19 (+6.64%).

Jonas decided to raise his base case target to $500 a share from $360 but also repeated his underweight recommendation. The latest bull scenario is majorly based on an “aggressive assumption” that Tesla will secure 30% of the global electric-vehicle market as elaborated by Jonas in a report to clients.

The deal would include up to 4 million car deliveries by 2030 and the potential for Tesla to supply powertrains to other auto manufacturers, including electric motors and batteries. Last year, the company handed over around 367,500 vehicles to customers.

Tesla (TSLA) Stock Is Rising

Tesla shares have enjoyed a wild ride this year. The TSLA stock is up around 91% in 2020 in a leap that is majorly attributed to a short squeeze, good results, an extreme case of investor FOMO, and the opening of a key new factory in china.

The surge cooled off just before the California-based company undertook a $2 billion share offering on February 14. The offering was priced at the steepest discount the carmaker has ever given to its investors. Analysts either remain highly skeptical or have not yet adjusted to the gain. The mean share-price target set by many analysts and tracked by Bloomberg is $489.47, translating to almost 39% below the current price level.

For now, Morgan Stanley’s bear case for the stock is now $220. That price is a 91% improvement from the broker’s most recent worst-price scenario. Despite all that is happening, Jonas insists on sticking to his recommendation against buying the stock. He says that the risk-reward balance on the manufacturer continues to be quite ‘unfavorable.’

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