By
Bena Ilyas
April 25th, 2024
In a recent survey by Morgan Stanley, investors have shown their willingness to put more trust in Tesla over other giants like General Motors and Toyota. Tesla (TSLA) stock gained over 6% yesterday.
The global automobile industry looks well poised for a technological revolution and America’s electric-car giant Tesla Inc (NASDAQ: TSLA) seems well-poised for it. Tesla (TSLA), which has been hated and ridiculed in the past for its ambitious projects, is now the preferred choice for investors. Also, the CNBC report shows that investors are showing more confidence in Tesla over other traditional giants like Toyota Motor Corporation (NYSE: TM) and General Motors (NYSE: GM). The recent coronavirus pandemic has completely changed the dynamics of the automobile industry.
Investors feel that in the post-COVID-19 economy, Tesla can lead the industry with its robust manufacturing facilities. Besides, Tesla has much-advanced technology at play for next-generation electric and autonomous cars. Being an early entrant in the game of electric and autonomous vehicles, Tesla has huge leverage in comparison to other giants.
While other companies stayed in denial about the consumer acceptance of electric cars, Tesla worked on accelerating its growth. Tesla came out as a clear winner after its Q4 2019 results released earlier this year. Just before the Coronavirus pandemic hit the global economy, Tesla (TSLA) shares surged a whopping 100% in the first 40 days.
By mid-February, Tesla’s share price climbed all the way to above $900 taking the company valuations over $150 billion. However, with the pandemic situation, the TSLA stock price remained largely volatile. But over the last month, Tesla’s stock has yet-again surged 60% from the low of $400 and around. At press time, the Tesla (TSLA) stock is trading at $732 with a market cap of $134 billion.
Morgan Stanley Survey Bring the Disclosure: Tesla, General Motors or Toyota Stock
To get the pulse of the market, Morgan Stanley conducted a survey among a group on investors associated with them. They asked them that if they have to invest $10 billion over the next five years, which of the top automobile companies would they choose. 56% of them selected Tesla, 24% of them selected Toyota, and 20% selected General Motors.
Apart from Morgan Stanley, several other analysts have vouched for buying Tesla in the long run. The company’s positive cash flow, robust technological prowess, can be some of the key factors for Tesla stock to perform well over the next five years.
However, there are still a few analysts who are not much confident about Tesla in the short term. After the recent price rally in TSLA stock, Bank of America downgraded its to underperform from neutral. According to BoA, the recent rally has pulled Tesla’s valuation way over its justification.
Similarly, analysts at BofA Securities have given a sell cal for Tesla in the short term. These analysts have predicted several challenges for Tesla in the near future majorly involving production challenges. This could ultimately impact the company’s cash flow ultimately affecting its revenue cycle.