A Morgan Stanley analyst is focusing on Tesla's (NASDAQ: TSLA) ability to expand its model lineup. He sees that if successful in this direction, the manufacturer's shares will trade above $900.
At the moment, there is concern among some investors that Tesla is facing regulation in China, which will bring increased attention to it. Morgan Stanley analyst Adam Jonas said Thursday on CNBC's "Squawk On The Street" that the firm is expressing concerns about the role of government policies. Nevertheless, despite this, Morgan Stanley continues to recommend Tesla.
Jonas points out that Tesla's success in China should not be the main reason investors buy and/or own stock. At the moment, the manufacturer has great opportunities in China, but most importantly, the company has the ability to increase the number of car models it offers. Tesla may expand its lineup "from just four today to maybe 24 in the coming years," which will open up new opportunities for the company. By producing new vehicles Tesla can enter the markets for vans, trucks, SUVs and fleets. The CEO of the company Elon Musk has already talked about the creation of a van in the future, which means that the company definitely intends to develop in this direction.
Morgan Stanley currently has a target price of $900 for Tesla, but there is a lot of upside potential. As the manufacturer expands its lineup and generates regular software-as-a-service revenue, the stock can trade "well beyond" $900.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.