Even though Model S sales may be down, Tesla stock is still a good BUY, according to Morgan Stanley analyst Adam Jonas.
Jonas reiterated his BUY Tesla Motors Inc. (NASDAQ: TSLA) on May 1, but removed its $320 price target.
“Investors are increasingly concerned about how the market will react to a possible YOY decline in N. American deliveries of the Model S in 2014,” Jonas said. “We believe a decline in NA deliveries is not only possible, but is likely … and reasonable. In fact, we’d argue that anyone with a FY14 global delivery forecast of less than 35k units has a global geographic split that clearly implies a YOY decline of Model S volume in N. America, if not a severe deceleration to near 0 percent growth. Will the headlines matter for how the stock trades? Very possibly. Are we fundamentally concerned? No.”
While that statement is a mouthful, Jonas has an 80 percent success rate recommending Tesla stock and has earned a +25.0 percent average over S&P-500 on the stock. His Tesla success ranks him at 115 out of 3,051 analysts with an average return on +6.7 percent over S&P-500 and an overall success rate of 55 percent. Jonas earned one of his highest returns recommending BUY Tesla in December 2013.
Jonas also thinks the Gigafactory could be a huge feather in Tesla’s cap.
“The success of Tesla’s Gigafactory could lead to the development of an entirely new industry, which could possibly break into a $1.5 trillion global electricity market,” Jonas said.
So what are you waiting for? BUY Tesla today!