Morgan Stanley Maintains Equal-Weight on Tesla, Raises TSLA Price Target to $333

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Morgan Stanley analyst Adam Jonas raised the firm's price target on Tesla (NASDAQ: TSLA) to $333 from $272 and keeps an Equal Weight rating on the shares after revising his forecasts to reflect better than expected Q3 deliveries and the $5B capital raise. 

Jonas noted that he increased his forecast for fiscal 2020 deliveries to 489,721 units from 474,820 units previously. In addition, he raised its 2021 delivery forecast to 698,000 units, an increase of 9%. The analyst updated his assumptions regarding Tesla's Mobility/Transport as a Service business.

"We believe that the company is in a better position to deploy its ride-hail/transportation as a service business faster and more profitably than our previous forecast. Reductions in the price of the car and battery, improvements in the EV charging infrastructure, insurance costs, residual value retention and other factors have also increased the economic inputs of our Mobility model for Tesla."

In late August, Jonas noted that Tesla should be considered more than just a car company. He noted that the best specialists in a wide variety of fields strive to work for Elon Musk. Tesla continues to gather assets, technology, and the talent necessary in its efforts towards opening a vertically integrated battery business that can improve the industry's cost curve.

Jonas named the potential to grow the company's battery business as a key driver for mid-term profit. He also noted that factors other than the sale and delivery of vehicles - which have traditionally provided both top and bottom margins for the world's most valuable automaker - may begin to have an increasing influence on Tesla's future success.

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