Morgan Stanley, which has been a permabull on Tesla (TSLA), has downgraded the stock from an “Overweight” to “Equal-Weight” while raising its target price to $425 from $410. The news came as a shock to me, as Morgan Stanley analyst Adam Jonas had been among the biggest Tesla stock bulls in the sell-side community.
However, the downgrade hasn’t come from Jonas, who has shifted to a new internal role focused on artificial intelligence (AI) companies, but from Andrew Percoco, who has assumed the coverage. Still, it is the first Tesla downgrade from Morgan Stanley in two years, so it would be prudent to explore the context. Let's examine why Morgan Stanley downgraded TSLA shares and whether it's time to give up on the Elon Musk-run company.
