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Why Investors Shouldn’t Panic about Tesla’s $10 Projection

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May. 21 2019, Published 11:05 a.m. ET

Tesla stock

This morning, Tesla (TSLA) was in the red for a fifth consecutive day. At 9:35 AM Eastern Time, Tesla stock was trading at $198.18, 3.5% lower than its previous day’s close. In the last five sessions, the stock has fallen 17.2%. As of yesterday, Tesla had lost ~38.3% year-to-date, while the S&P 500 and NASDAQ Composite had risen 13.3% and 16.1%, respectively.

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What triggered Tesla’s sell-off today?

Today’s massive Tesla sell-off was triggered by Morgan Stanley analyst Adam Jonas’s worst-case scenario projection of $10, which made headlines this morning.

Nonetheless, according to Reuters, Jonas has maintained his “equal-weight” rating and main $230 target for Tesla, which implies a 12% upside from the stock’s closing price of $205.36 yesterday. Jonas has also given a best-case scenario projection of $391, significantly higher than the company’s market price.

Jonas praises Tesla

Investors may wish to carefully examine Morgan Stanley’s stand on Tesla before making any decisions on the stock. In a note, Jonas also praised Tesla, saying, “Based on our discussions with auto companies, suppliers, and technology firms, Tesla’s strategic value and technical competency in both hardware and software remains extremely high if not in a league of its own.”

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