"(Bloomberg/Matthew Griffin) Elon Musk is eager to transform Tesla Inc. into a robotics and artificial intelligence company, but the electric-vehicle maker's stock price already reflects those businesses and is at a full valuation, according to Morgan Stanley, which lowered its rating on the company to the equivalent of a hold, its first cut since June 2023. Tesla shares trade at about 210 times projected earnings over the next 12 months,"
"While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment over the next year, analyst Andrew Percoco wrote in a note to clients on Sunday, his first as the firm's new head of Tesla coverage. We see downsides to estimates, while the catalysts for its non-auto businesses appear priced at current levels."
Morgan Stanley lowered Tesla's rating to equal-weight and set a $425 price target, implying a 6.6% decline from the prior close. Tesla trades at about 210 times projected earnings, ranking among the highest multiples in the S&P 500. The firm assigns roughly $60 per share to the Optimus humanoid-robot initiative but views catalysts for non-auto businesses as largely priced in. The new coverage lead expects North American EV sales volume to drop about 12% next year amid an industry slump. Analyst coverage shows a wide spread of buy, hold and sell opinions, and the stock has remained volatile.
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