Morgan Stanley elevated Tesla to "Top Pick" in US Auto Sector replacing Ford
$Tesla(TSLA.US$ $BYD COMPANY(01211.HK$ $NIO Inc(NIO.US$ $XPeng(XPEV.US$ The article reported that Morgan Stanley has elevated Tesla to its "Top Pick" in the US autos sector, replacing Ford. Analysts project a 40% upside, aiming for a $310 target price, underpinned by several factors driving firm value and more managed expectations on autos.
Here are the 5 reasons:
1) Tesla's effective cost-cutting and restructuring efforts. The company's Q2 results aligned closely with consensus expectations, exceeding Morgan Stanley's predictions.
2) With over $0.6 billion in restructuring charges recognized, Tesla has lowered its breakeven point, enabling positive cash flow even with 69% EV capacity utilization last quarter.
1) Tesla's effective cost-cutting and restructuring efforts. The company's Q2 results aligned closely with consensus expectations, exceeding Morgan Stanley's predictions.
2) With over $0.6 billion in restructuring charges recognized, Tesla has lowered its breakeven point, enabling positive cash flow even with 69% EV capacity utilization last quarter.
3) Tesla's strategic redirection of resources away from auto manufacturing also stands out to Morgan Stanley. Tesla's dominance in the zero emission vehicle (ZEV) credit market is another key factor. The company reported ZEV credit revenue of approximately $2,000 per unit, more than double the recent run-rate.
4) Tesla's effective management of exposure to China risks, with China-sourced revenues at 18.2% in Q2 2024. This figure is expected to decline systematically, reaching about 10% of Tesla's auto unit volume by 2030.
5) The increasing contribution from recurring services revenue and Tesla's strong position in the fast-growing energy storage portfolio is also seen bolstering the company's prospects. Services and Other revenues rose 21% YoY, with the Tesla Energy business potentially surpassing the auto sector in value.
4) Tesla's effective management of exposure to China risks, with China-sourced revenues at 18.2% in Q2 2024. This figure is expected to decline systematically, reaching about 10% of Tesla's auto unit volume by 2030.
5) The increasing contribution from recurring services revenue and Tesla's strong position in the fast-growing energy storage portfolio is also seen bolstering the company's prospects. Services and Other revenues rose 21% YoY, with the Tesla Energy business potentially surpassing the auto sector in value.
Source:
$BYD COMPANY(01211.HK$ $BYD Co.(BYDDF.US$ $S&P 500 Index(.SPX.US$ $Nasdaq Composite Index(.IXIC.US$ $Tesla(TSLA.US$ $VOLKSWAGEN A G(VWAGY.US$ $NIO Inc(NIO.US$ $Li Auto(LI.US$ $XPeng(XPEV.US$ $General Motors(GM.US$ $Ford Motor(F.US$ $Rivian Automotive(RIVN.US$ $MERCEDES-BENZ GROUP AG(MBGAF.US$ $TOYOTA MOTOR CORP(TOYOF.US$ $GEELY AUTO(00175.HK$ $Stellantis NV(STLA.US$
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I reflected trading experiences by writing journals. My comments are for educational purposes not financial advice.
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Jamesjinlin : Damascus has finally been tricked into the boat by Musk. It's probably deeply entrenched. As long as the Democratic Party is in power for a day, Musk's deception won't be useful. Don't forget that his car is manufactured in China. Is Dama talking in a dream, hahaha.
ZnWC OP Jamesjinlin : Based on your logic, the stock will continue to be bullish.