Tesla Decline Provides a Buying Opportunity, Says Analyst

Despite Tesla’s (NASDAQ: TSLA) share price decline Morgan Stanley’s Adam Jonas believes it provides investors with a buying opportunity.

The Tesla bull reiterated an Overweight rating and $330 price target on the stock in a note to clients on Wednesday. 

Tesla shares have fallen 55% in the last 12 months, 64% this year, and 13% in the last week. The recent decline is due to investor concerns regarding CEO Musk being preoccupied with the goings on at Twitter, which he recently acquired.

However, Jonas said Tesla shedding $600 billion in value in just three months presents a buying opportunity, adding that for the “ambassador” of EVs, this valuation decline “raises questions for investment returns and capital formation across the sector.” 

In addition, with price cuts starting in China, he expects them to spread to the US and Europe quickly. Jonas argues that lower electric vehicle prices are important for the next leg of mass adoption, although he notes that they “depress the returns of many of the companies expected to compete against Tesla.” 

Elsewhere on Wednesday, Deutsche Bank analyst Emmanuel Rosner cut the firm's price target on Tesla to $270 from $355, reiterating a Buy rating. Rosner lowered his fourth-quarter deliveries estimate for the EV giant to 420,000 units, reflecting some macro weakness, particularly in China, as well as the postponement of deliveries to the first quarter of 2023 in the US from some consumers to benefit from Inflation Reduction Act incentives.

Tesla shares have risen slightly premarket Thursday, up 0.14% at the time of writing.