By Michael Elkins
Morgan Stanley reiterated an Overweight rating and $383.00 price target on Tesla Inc (NASDAQ:TSLA) following the company’s 3Q delivery report. The electric vehicle maker’s 3Q delivery volume missed consensus estimates by 5% and Morgan Stanley estimates by 10%. Management cited logistics bottlenecks as the reason for the miss.
Morgan Stanley's note stated, “It’s unlikely Tesla will compensate for the FY shortfall fully in 4Q. Combined with a mostly non-event AI day, we’d expect shares to give back recent relative strength.”
Tesla’s 3Q preliminary deliveries came to 343,830 units compared to the consensus estimate of 362,733. The nearly 20k unit shortfall represents roughly a $1bn revenue shortfall and, Morgan Stanley estimates, approximately $300m of lost gross profit vs. consensus.
While Morgan Stanley believes demand for Tesla products exceeds supply, it would be unreasonable to assume that there is both a limit to how much Tesla can continue to increase prices without demand suffering and that the company was not exposed to decelerating macroeconomic growth.
Morgan Stanley expects the upcoming Master Plan X to be squarely aimed at addressing the manufacturing process and supply chain with an aim for the company to better control its own destiny in an increasingly deglobalizing world.
Shares of TSLA are up 3.1% in pre-market trading on Tuesday.