Pay Attention to Tesla’s Musk Warning on Economy – Morgan Stanley’s Jonas
2022.06.03 18:21
Pay Attention to Tesla’s (TSLA) Musk Warning on Economy – Morgan Stanley’s Jonas
By Sam Boughedda
Following reports Tesla (NASDAQ:TSLA) will pause all hiring worldwide and potentially cut 10% of its headcount with CEO Elon Musk having a “super bad feeling” about the economy, MS analyst Adam Jonas said, “Tesla’s not your average canary in the coal mine. It’s more like a whale in the lithium mine.”
The analyst, who has an Overweight rating and a $1,300 price target on the stock, laid out a list of his four initial thoughts following the news.
Firstly he argued that Elon Musk “has a uniquely informed insight into the global economy.”
“We believe that a message from him would carry high credibility. Tesla is the world’s most vertically integrated car company from mining to chips, down to real-time miles traveled and vehicle charging data,” wrote Jonas.
Secondly, Jonas said that “if the world’s largest EV company warns on jobs and the economy, investors should reconsider their forecasts on margins and top-line growth.”
In his third point, the analyst, who has historically been bullish on Tesla, explained that the company’s productivity on a per-worker basis has room to improve, while in his fourth, he asked the question as to whether it is time to revise electric vehicle forecasts down.
“The world has changed in many ways this year. The supply chain is under tremendous stress, inflation is hampering demand, and capital markets are less ebullient. The economy is decelerating. Geopolitical risks are front and center. It is possible to be a long-term EV bull while revising down the adoption curve through mid-decade.”
