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Tesla shares get a boost after Morgan Stanley raises price target to $379


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Tesla shares saw a boost on Tuesday after Morgan Stanley raised the stock’s 12-month price target from $317 to $379. Analyst Adam Jonas told investors that electric vehicles are expected to reach 520 million units by 2040 and any automaker looking to compete within the sector must have a plan for a charging infrastructure.

“Infrastructure (of lack thereof) is the ‘elephant in the room’ of the EV revolution,” said Jonas in a note. “Compared to other OEMs (Original Equipment Manufacturer), Tesla has made the biggest proprietary investment in superchargers and destination chargers globally. In most communities, we believe this infrastructure is larger than it needs to be in preparation for the expansion of the serviceable and charge-thirsty fleet. Other OEMs will closely watch how consumers react to this infrastructure.”

Jonas increased his “Core Tesla” exit EBITDA multiple to 10x from 9x and keeps an Equal Weight rating on the shares. He expects Tesla will hold a 6% share of the global electric vehicle market by 2040.

The adjusted price forecast for Tesla shares follows yesterday’s nearly 4-point slide after a report by the Wall Street Journal said that the Silicon Valley carmaker was building large portions of its mass market car by hand. A research note from Barclays analyst Brian Johnson on Monday, saying that delays in Model 3 production could deny Tesla of its “iPhone moment” further fueled investor’s concerns.

Despite a downbeat Monday, shares of Tesla rebounded Tuesday morning following Morgan Stanley’s updated research note. Tesla share are currently trading at $349.88 and up over 2% from Monday’s close. The stock price has seen an increase of nearly 60% this year.

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