Tesla’s upcoming Investor Day on March 1st is expected to be a pivotal event that could impact the growth of the company’s stock, according to a recent note from Morgan Stanley. The investment firm, led by analyst Adam Jonas, says that while Tesla’s stock has been performing well, the “window of opportunity” for valuation has closed and a more substantial narrative change is needed after the Investor Day to drive further growth.
Tesla’s ability to adjust prices with its high margins has driven up demand for the company’s vehicles in 2023, a trend that is expected to continue. The automaker recently cut the price of its Model Y by $13,000 and made similar adjustments in other markets such as China. Furthermore, the Model Y has been added to the list of vehicles eligible for federal tax incentives, giving potential buyers even more reason to purchase the car.
See also: Elon Musk to Unveil Tesla’s Master Plan 3 on March 1st Investor Day
However, Morgan Stanley believes that just an increase in demand is not enough. The investment firm is hoping for potential catalysts from Tesla’s Master Plan Part 3 that could convince investors of the company’s ability to drive substantial growth in the future. Despite the need for something groundbreaking to justify another valuation spike, Morgan Stanley acknowledges that Tesla still has a healthy lead over its competitors.
The analyst also notes that Tesla’s competitors, both established players and startups, are struggling to keep up with Tesla’s cost and scale advantages, which gives the EV leader a specific leverage. Morgan Stanley reiterates its ‘Overweight’ rating for Tesla with a $220 price target.
