By Sam Boughedda
Tesla's (NASDAQ:TSLA) price target was cut to $1,200 per share from $1,300 by Morgan Stanley analyst and Tesla bull Adam Jonas on Wednesday.
Jonas said the firm's second-quarter unit estimates have been cut to 270k units compared to the previous 316k units, taking their FY22 volume forecast to 1.390mm vs. 1.425mm previously.
"We mark to market our 2Q forecasts for lower volume (latest data, China) with most of the shortfall made up for in 2H volume and higher pricing. Target falls to $1,200 (vs. $1,300) almost entirely due to WACC increasing to 9% from 8.5% previously," said Jonas.
Jonas added that with their volume estimates, they have allowed for some "modicum of upside" given the "historic ability of Tesla to significantly increase production/sales in the latter weeks of a given quarter."
"According to data from EV-Volumes, since 2019 in the 3rd month of a given Q, TSLA's sales have ranged from 47%-69% of its quarterly sales. This continued in 1Q22 where March sales accounted for 58% of sales in the quarter. With TSLA 2Q sales estimated to be around 100k units through May (EV-Volumes), we believe TSLA will flex its manufacturing prowess, aided by accelerated ramp of Austin and Berlin, and deliver ~170-175k units in June, slightly below the estimated ~180k units delivered in March '22."
The analyst maintained an Overweight rating on the stock, adding that they would buy Tesla weakness on a potentially weak 2Q print.