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<p class="has-drop-cap">Tesla Inc. (<a href="https://tokenist.com/investing/how-to-buy-stocks/" rel="dofollow" class="deco-link">NASDAQ: TSLA</a>) has been <a aria-label="named (opens in a new tab)" href="https://www.investors.com/news/tesla-stock-replaces-ford-top-pick-in-auto" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">named</a> the new “top pick” in the U.S. auto sector by Morgan Stanley, replacing Ford Motor Co. (<a href="https://tokenist.com/investing/how-to-buy-shares-online/" class="deco-link">NYSE: F</a>). The announcement, made on July 29, 2024, by analyst Adam Jonas, sent Tesla’s stock surging amid a broader market rally.</p> 
<h3 id="morgan-stanley-s-bullish-stance-on-tesla">Morgan Stanley’s Bullish Stance on Tesla</h3> 
<p>Morgan Stanley sees a 40% upside potential for Tesla stock, citing its effective risk management in its automobile business and its dominance in the zero-emission vehicle (ZEV) credit market. Tesla now ranks first on Morgan Stanley’s list, followed by Ford and Ferrari, with EV startup Rivian placed 11th.</p> 
<p>Jonas noted that Tesla is strategically shifting resources from its auto segment as EV demand forecasts have decreased. The company’s ZEV credit revenue reached approximately $2,000 per unit in Q2, more than double its recent rate. As legacy automakers scale back their EV plans, Tesla is poised to dominate the lucrative ZEV credit market further.</p> 
<p>While bullish on Tesla’s overall prospects, Morgan Stanley tempered expectations for certain aspects of the company’s business. <br><br>The firm projects Tesla’s China business to diminish in importance over time, with China revenue expected to account for only 10% of auto unit volume and 6-7% of total group revenue by 2030. Jonas also expressed skepticism about near-term expectations for Tesla’s Full Self-Driving (FSD) and <a href="https://tokenist.com/what-teslas-robotaxi-could-mean-for-its-stock-price/" rel="dofollow" class="deco-link">robotaxi services</a>, doubting that China would allow Tesla to deploy robotaxi technology even if developed.</p> 
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<h3 id="tesla-stock-gains-over-5-on-the-news">Tesla Stock Gains Over 5% on the News</h3> 
<p>Following Morgan Stanley’s announcement, Tesla’s stock jumped 5.38% to $231.63 as of 10:08 AM EDT on July 29, 2024. This rally comes after an 8% drop the previous week due to disappointing Q2 earnings. Tesla’s market capitalization stands at $740.326 billion, with a trailing P/E ratio of 61.74 and earnings per share of $3.56.</p> 
<p>Despite the recent surge, Tesla’s stock has underperformed <a href="https://tokenist.com/the-bull-and-bear-case-for-spx-in-2024/" rel="dofollow" class="deco-link">the S&amp;P 500</a> year-to-date, with a return of -6.74% compared to the index’s 14.90% gain.<br><br>However, Tesla’s long-term performance remains impressive, with a five-year return of 1,424.34%, significantly outpacing the S&amp;P 500’s 81.12% return over the same period. The current stock price exceeds the analyst average price target of $187.90, reflecting renewed optimism in the electric vehicle maker’s prospects.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe> 
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p> 
<h3 id="br"><br></h3> 
<p>The post <a rel="nofollow" href="https://tokenist.com/tesla-stock-gains-as-morgan-stanley-names-new-us-auto-top-pick/">Tesla Stock Gains as Morgan Stanley Names New US Auto “Top Pick”</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Tesla Stock Gains as Morgan Stanley Names New US Auto “Top Pick”

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