Lol. I'm sorry what. 290 is still above 197. Lol there's no way to predict a drop or not based on a PT.
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Lol. I'm sorry what. 290 is still above 197. Lol there's no way to predict a drop or not based on a PT.
CyberDutchie
Active Member
Main argument for Morgan Stanley's lowered price target to $290 from $320 is the combination of 1) lower gas prices and 2) rapid improvements in ICE fuel economy (to 100MPG) that is lowering the potential success for Tesla's mass market Model 3.
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Well, you know what the headlines are gonna say. The honest ones say Morgan Stanley lowers price target, but most will say Morgan Stanley downgrade or something like that. Where in fact it's not a downgrade, they maintained the "overweight" rating.
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Well, you know what the headlines are gonna say. The honest ones say Morgan Stanley lowers price target, but most will say Morgan Stanley downgrade or something like that. Where in fact it's not a downgrade, they maintained the "overweight" rating.
That's a fair point. Honestly though, we've seen so much red we have to be bound for a bounce soon.
The $320 price target that Jonas announced in late February was comparably above the then current price as the new $290 target is above yesterday's price. Considering the recent slide, his moderately lowered price target should not surprise anyone.
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sundaymorning
Active Member
Raffy.Roma
Rome (Italy)
1) I'd be surprised if the prices for petroleum products don't rebound in the meantime.
2) The cost to a car buyer for a 100 mpg ICE would likely be quite high. Meanwhile, the cost of battery packs and electric drive units will likely be reduced. And if ICE manufactures cannot meet increased governmental mileage requirements, that will be the end of ICE.
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mejojo
Active Member
What EVs are you considering when you say "the 120 mile range figure references a typical electric car range before Tesla arrived"?
I certainly would have bought a 120 mile EV in 2012, but I am not aware of any that were over 70 miles...at least in the US.
This article makes a good argument for why the price of oil won't affect demand for Tesla vehicles.
http://seekingalpha.com/article/2749005-cheap-oil-may-affect-green-vehicle-sales-but-probably-wont-affect-tesla-motors-sales
http://seekingalpha.com/article/2749005-cheap-oil-may-affect-green-vehicle-sales-but-probably-wont-affect-tesla-motors-sales
That's my worry these days. With stock price keeps sliding down, those lofty $300+ PT will be adjusted. This is not the first one and more yet to come. But I doubt it will have materilized impact, if there has a temporary deep dip, then it's good buy opportunity.
Oil prices may go up soon, but for foreign markets, they are largely irrelevant. Either because in Europe price at the pump is dominated by taxes or because current buyers are luxury buyers who have enough disposable income to disregard cost of usage issues. The dollar price however makes a big difference and the era of the cheap dollar is over. I would bet oil prices rise before the dollar becomes cheaper again. Currently not yet likely, but we may even see parity between the dollar and the euro some time down the road. With the gigafactory, Tesla is actually increasing the American content of this car. As others have noted, the recent rise in the dollar hasn't even been fully reflected in pricing. So either Tesla has to give up its practice of uniform gross margins everywhere or it will have to increase prices for foreign buyers by a lot more. Or it will have to shift production to foreign markets which would be a huge additional capital outlay for which it would have to go to the market.
I think the recent slide reflects the uncertainty about Tesla becoming a global powerhouse which seemed all but a done deal just 6 months ago. I would also like to draw your attention on official communication (mainly by Elon) on the subject of international markets : Germany was supposed to be their biggest foreign market, UK was supposed to become huge, China was supposed to be 30% of their deliveries. It's a recurring theme whenever he opens a store somewhere for the first time or hand deliveries the signature cars
The reality is that the US market increased in importance relative to other markets. The next big thing is going to the Model X, which in my opinion, again will be more favorably received by the US consumers than elsewhere. Taken all this together, I think there is a legitimate case to be made that foreign markets going forward will be much more challenging then they were going backwards. And if that is true, it should fundamentally reflect in a lower expected stock price.
I think the recent slide reflects the uncertainty about Tesla becoming a global powerhouse which seemed all but a done deal just 6 months ago. I would also like to draw your attention on official communication (mainly by Elon) on the subject of international markets : Germany was supposed to be their biggest foreign market, UK was supposed to become huge, China was supposed to be 30% of their deliveries. It's a recurring theme whenever he opens a store somewhere for the first time or hand deliveries the signature cars
The reality is that the US market increased in importance relative to other markets. The next big thing is going to the Model X, which in my opinion, again will be more favorably received by the US consumers than elsewhere. Taken all this together, I think there is a legitimate case to be made that foreign markets going forward will be much more challenging then they were going backwards. And if that is true, it should fundamentally reflect in a lower expected stock price.We'll see if the TA's are right. The technical analysis predicts the next support level at $177.
I'm torn between buying today at $195ish or waiting to see if the TA is correct and the price goes to $177.
Responses to the last pages: Model III won't start at 55k and AJ should know that, gas cars won't get to 100mpg in 2 years when it has taken them the last 6 or so to go from 20 to 25 (and that includes hybrids and EVs skewing the number up drastically), there are plenty of EVs with over 70mi rated range (rated being conservative IMO, I beat rated range all the time), the quartz article is ridiculous since it calls ICE tech a "moving target" which is hilarious and because the model s is already cheaper than any car it competes with on feature set, worries about world markets are irrelevant unless you think tesla will be demand constrained anytime soon.
Anyone has a link to the report? If Jonas believes that a Tesla will be able to reduce price from 70k currently to 55k, he is no longer a bull. If I understand his theory and agree with reasoning, there is no future for Tesla as Gen3 at 55k is not the future. The price target and reasoning don't go together IMO.
Does anybody have access to the Jonas research note? I'd love to read it and see his logic. I'm sure he has at least one interesting point.
That said, I was a sell side analyst for a long time. I agree with what some others wrote here. Jonas had a stale target and had to to something. On Wall Street it isn't acceptable to do nothing in response to big changes in variables like oil. Your sales desk does not appreciate a long term view. So analysts have to spend way too much BS time analyzing (read guessing) the short term.
I'm particularly interested in why Jonas thinks the M3 will cost $60k.
That said, I was a sell side analyst for a long time. I agree with what some others wrote here. Jonas had a stale target and had to to something. On Wall Street it isn't acceptable to do nothing in response to big changes in variables like oil. Your sales desk does not appreciate a long term view. So analysts have to spend way too much BS time analyzing (read guessing) the short term.
I'm particularly interested in why Jonas thinks the M3 will cost $60k.
Agree that the starting price will be about $35K. With 'free charging'; larger battery; interior amenities/upgrades it could very well be $50K. It will compete in price with '3 series' but compete in 'value' with the Camry with better acceleration/less maintenance.
chickensevil
Active Member
Keep in mind the CIO just recently said during a conference in India that they were still targeting between 30-40k, so AJ is off his rocker.
I totally agree that the ASP of the model three will be much higher than $35,000. I assume Adam Jonas already knows this. I would be very disappointed if that was some kind of shocking revelation to him.
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