Morgan Stanley affirms Tesla Buy Rating Energy’s Growing Impact Valuation and Profitability

Adam Jonas, analyst from Morgan Stanley, maintained the Buy rating on Tesla. The associated price target remains the same with $310.00. He thinks that Tesla Energy’s growth and profitability prospects are key drivers to the Buy rating:

1) Jonas recognizes that a generational surge in energy demand, spurred by advancements in General Artificial Intelligence, is increasing the focus on energy storage solutions. This demand is reflected in Tesla Energy’s significant outperformance in recent storage deployment figures, which were more than double expectations.

2) Jonas has revised his valuation model to reflect the growing importance of Tesla Energy, increasing its contribution to his price target for Tesla’s stock from $36 to $50 per share.
3) Jonas points out that Tesla Energy’s shift towards energy storage, which now makes up 95% of its revenue, enhances the company’s margin profile compared to its automotive business. With the Tesla ‘Megafactory’ capable of producing a massive amount of Megapacks annually, Jonas illustrates the immense profitability potential of the energy sector, potentially exceeding that of Tesla Auto.

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