According to a Morgan Stanley analyst, the recent beating Tesla’s stock (TSLA) has taken has brought it close to stock level. Tesla has recently delivered record quantities of automobiles, sales, and profit, but this isn’t showing up in the performance of its shares. According to several experts, Tesla is finally approaching the price range of a value company after years of trading at multiples over its revenue and profitability.
Longtime Tesla supporter and Morgan Stanley analyst Adam Jonas observed in a fresh note to clients this week that Tesla’s stock is approaching his $150 per share bear case, making it more appealing from an EBITDA multiple perspective. Morgan Stanley reiterates its overweight (or Buy) rating and $330 price target, representing a considerable increase above Tesla’s current stock price.
Tesla shares would trade at approximately 12.5x EV/EBITDA and 23x 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.
Elon Musk is clearly to blame for this decline in value, both directly by selling billions of dollars’ worth of Tesla stock over the period and indirectly by some investors losing faith in him as a result of the Twitter crisis.
However, it is generating an odd situation in which Tesla appears to be concerned about its stock price for the first time, despite the fact that they wanted it to be high in order to attract more funding.
The company’s board of directors has confirmed discussions about launching a stock repurchase programme between $5 to $10 billion. This would undoubtedly assist, but it’s difficult to estimate how much. It is preferable to concentrate on Tesla’s core business, which remains robust and is anticipated to grow stronger next year, particularly in the United States, after regaining access to the federal EV tax credit.
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