Analysts at Morgan Stanley are bullish on Tesla (TSLA), recently adjusting their price forecast for the company’s stock based on several factors. The firm gave TSLA shares an “overweight” rating while upping its price prediction to $410. At press time, Tesla stock is trading around $360.
Morgan Stanley believes that Tesla stock remains a top choice among the Magnificent Seven and the tech sector. The firm’s latest investor report says that Tesla’s leadership in the electric vehicle and AI humanoid robot sectors will drive the growth of rare earth demand. It is expected that by 2050, humanoid robots will increase the demand for critical minerals by approximately $800 billion.
Additionally, Morgan Stanley stated that the $410 target price is based on the valuation of Tesla’s various businesses, with the core automotive business valued at $75 per share, the network services business valued at $160 per share, the mobility services valued at $90 per share, the energy business valued at $67 per share, and the third-party supply business valued at $17 per share.
Morgan Stanley noted that China dominates the mining and refining of rare earths, controlling 65% of rare earth mining and 88% of rare earth refining. This makes it urgent for Western producers to diversify their supply chains. The firms added that for the foreseeable future, the U.S. seems likely to continue relying on China’s rare earths. Thus, Tesla’s efforts in humanoid development could take a heavier market share in that sector in due time, making it and rare earths far more valuable.
Tesla’s Performance Across The Pond
Furthermore, Tesla is also up despite underperforming abroad. Tesla sales fell by 49% in April, according to the European Automobile Manufacturers Association (ACEA) on Tuesday. Moreover, the market share plummeted to 0.7%, along with global deliveries that came in well below the 390,342 expectations. However, speaking on the recent earnings call, CEO Elon Musk said that the company’s European business is “already turned around.” Moreover, he noted that the area is their “weakest market,” while ensuring that the firm is “strong everywhere else.”
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Tesla (TSLA) barreled through the $350 mark Tuesday, jumping more than 5% in the last five days. Indeed, all eyes are now set on the $400 mark as it looks to continue its 26% surge over the past 30 days. Currently, the stock has a bullish projection at $500, up 39% from its current position, according to CNN data.
