- Morgan Stanley reiterated an ‘Equal Weight’ rating and $400 price target on Tesla, implying 12% upside.
- The brokerage warned that a limited Cybercab rollout could cause shares to sell off, while a broader rollout could drive the stock higher.
- China-made Tesla sales rose 3.6% in August, a sharp slowdown from July’s 38% growth, while European data was mixed.
Tesla (TSLA) shares edged 0.4% higher in pre-market trading Wednesday ahead of the EV maker’s highly anticipated Cybercab launch event in Texas on Thursday, as Morgan Stanley highlighted a key factor that could determine stock movement. The brokerage reiterated an ‘Equal Weight’ rating and a $400 price target, implying a 12% upside from current levels, according to Investing.com.
Analyst Andrew Percoco said past company events have produced mixed reactions, with evidence of actual commercial deployment often making the difference. If Tesla simply unveils the Cybercab and puts only a limited number of vehicles on the road, the firm expects shares could sell off through the event.
However, a broader rollout that meaningfully increases Tesla’s robotaxi fleet could drive the stock higher. Morgan Stanley noted that recent Texas DMV data showed Tesla had registered about 40 more Cybercabs, suggesting preparations for a larger rollout.
Meanwhile, Tesla’s traditional EV business showed uneven trends across key markets. Sales of China-made Model 3 and Model Y vehicles rose 3.6% year-over-year to 86,166 units in August, according to a Reuters report, marking the tenth straight month of growth but a sharp fall from July’s 38% jump.
European data was also mixed in August, with registrations jumping 279% in France and 104% in Denmark, while falling sharply in markets including Norway, Spain, Sweden, Portugal and Italy. Retail sentiment on Stocktwits remained ‘bearish’ over the past 24 hours, despite one user noting that Tesla’s “catalysts keep stacking up.”
TSLA is the worst-performing Mag 7 stock this year, declining nearly 19%.
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