Morgan maintains Tesla's target share price of $345, and this year's sales growth rate is expected to be less than half of last year

Morgan Stanley analyst Adam Jonas maintained Tesla's “hold” rating and set a target stock price of $345 despite warning that Tesla's fourth quarter financial results fell short of expectations and that sales volume growth would slow drastically in 2024.

Jonas stated in the report that no new information was obtained in Tesla's financial results and subsequent conference calls that would change the general bearish mentality. In fact, analysts said that if Tesla fails to regain confidence in its growth prospects, there is a possibility that stock prices will continue to fall below recent trading levels.

According to Jonas, Tesla has provided little detail about its outlook for this fiscal year. Tesla has stated that sales in 2024 will “drop drastically” compared to last year, but the ratio has not been specified. Jonas predicts that Tesla's sales growth rate in 2024 will drop to 15%, which will be less than half of the 38% growth rate in 2023.

However, since there is a high possibility that an AI surprise will occur this year, and the capital investment amount for 2024 is expected to be at least 10 billion dollars, which is higher than Morgan Stanley's forecast (about 8.5 billion dollars), he has not lost his bearish view on the company's stock.

At the earnings briefing, Tesla CEO Elon Musk stated that there is a possibility that the latest information on AI developments will be provided later this year.

While lowering Tesla's sales forecast for 2024 to 106 billion dollars, Mr. Jonas maintained a target value for stock prices due to a decline in automobile sales forecasts. However, the analyst currently predicts that gross profit of the automobile business for the next fiscal year will increase slightly to 13.3 billion dollars, and operating profit margins will also rise slightly, and the operating profit margins for 2024 and 2025 will be 5.9% and 8.3%, respectively.