Tesla Inc. (TSLA) - Get Report shares retreated further from all-time highs Thursday after analysts at Morgan Stanley cut their rating on the clean-energy carmaker to 'underweight', citing concerns for the sustainability of the stock's recent surge.
Morgan Stanley analyst Adam Jonas, however, lifted his price target on the stock by $110, to $360 per share, to partly reflect the more than 35% gain the shares have seen over the past month as the group topped Street estimates for 2019 deliveries and cut the tape on its massive production facility in China.
"Near-term momentum and sentiment around the stock is admittedly very strong, but we ultimately question the sustainability of the momentum," Jonas said, adding "We believe the current share price discounts a fully ramped up China, Berlin and Model Y."
"We are increasing our expectations for the core auto business and decreasing our expectations for the mobility business, resulting in a net material increase in our target price," Jonas said. "Our revenue forecast through 2030 increased approximately 10% on average vs. our prior forecast, culminating in a roughly 300,000 unit increase by 2030 (to a total of 2 million units in annual volume) vs. our previous forecast of 1.7 million in volume by 2030."
Tesla shares were marked 3.45% lower in early trading Thursday to change hands at $500.63 each, a move that would still leave the Elon Musk-founded group with a $91 billion market value and a six-month gain of more than 100%.
The Morgan Stanley downgrade follows a report that suggests Tesla is once again the most shorted stock in the U.S. market, overtaking Apple Inc. AAPL -which has a market value of more than $1.4 trillion.
Investors have borrowed $14.5 billion to bet against Tesla shares, data by financial analytics firm S3 Partners and published by Bloomberg, just ahead of the $14.3 billion short against the iPhone maker.
Tesla hit an all-time high of $547.41 earlier this week after analysts at Oppenheimer boosted their price target to a Wall Street high of $612 per share and called for its inclusion in U.S. equity benchmarks.
Oppenheimer's Colin Rusch nearly doubled his existing price target for Tesla, which he set in late October at $385 per share, to $612 per share in a client note that argues the group has reached "critical scale" to support sustainable free cash flows.
He also suggests the Elon Musk-controlled company could pose and "existential threat" to transport companies that do not have the ambition or the ability to innovate at Tesla's torrid pace.