Morgan Stanley significantly reduced his forecast for Tesla shares.
It says, in the worst case, their US value would only be $ 10 (this Tuesday they traded for US $ 205).
We note concerns about debt, sales in China and geopolitical exposure of the company.
Mogan Stanley, who currently has a target price for Tesla from US $ 230 per share, warned in a report on Tuesday, t in the worst of its scenarios, it's not ruled out cutting the forecast to US $ 10 per share.
The hard analysis identifies concerns about the increased debt burden and geopolitical exposure of the company.
In particular, analysts in Morgan Stanley say that the fall is due to the problem around demand collapse in China for Tesla products.
"We understand that Tesla will not reach our current forecast of sales volume in China (it will fall by half) due to a very volatile commercial situation in the region, particularly in technology areas. there is a high and growing risk of governmental and regulatory tension ", the analysis of the company signed by Adam Jonas says.
Morgan Stanley expects the company to sell an annual average of 165,000 units in China between 2020 and 2024.
"As the price of Tesla shares is falling, we believe that the likelihood of the company seeking alternatives from strategic partners, both industrial and financial," by note, is positive. Almost the only one.
"Based on our conversations with automotive companies, suppliers and technology companies, t The strategic value of Tesla and its technical competence in hardware and software remains very high ", add
"The demand is at the heart of the problem," analysts said. "Tesla has grown too much in relation to short-term purchasing applications, adding great pressure."
The departures of some key operators, the price cuts, the remarkable "cost reduction efforts" add to the description of a company facing real stress, "added the analysts in the US investment bank, Bloomberg.
Tesla achieved only 63,000 cars in the first quarter of 2019. "Achieving the goal for the whole year will be a Herculean task", has told the other analyst weekend, Dan Ives, in this case Wedbush Securities.
The idea is that Tesla will boost its demand by expanding its aggressive through China (then the marketing strategy is to offer utility vehicles with lower prices to companies), t But the commercial tensions between the US and China and the appearance of new competitors almost every day are putting everything at risk.
Tesla's shares fell to US $ 200 on Monday after Wedbush reduced its target price from US $ 275 to US $ 230. He referred to another cause of concern to shareholders: the potential impact of Elon Musk's attention on the "Science fiction projects", CNBC announced.
The shares fell by 2.7% on Monday and this Tuesday fell by 5%.
In addition to Morgan Stanley and Wedbushfinancial services company Baird also cut its Tesla estimates on Tuesday: from US $ 340 to US $ 400 per share.
Rowe Price, which was one of Tesla's largest investors, sold around 81% of its holdings in the first three months of 2019.