Why Morgan Stanley (NYSE:MS) Is So Optimistic About Tesla Motors Inc (NASDAQ:TSLA)?

Tesla Model X

Morgan Stanley (NYSE:MS), the investment bank, continues to pay paeans to Tesla Motors Inc (NASDAQ:TSLA). The analyst firm expects the world’s prolific electric car maker to soon become a global leader in electric cars, and with time, come to dominate the auto industry.

Morgan Stanley’s top-ranking of this big data-guzzling electric car maker was revealed when it promoted Tesla amongst its investor community, via video. Morgan Stanley rates Tesla Motors with a price tag of $280 per share, which is nearly $100 more than the current price of the stock.

While the bank does protect itself, when it claims in its forecast that Tesla Motors will grow to ‘stock prices that are ten times’ its present value, it can lose it by half as well. Driving Morgan Stanley’s upside rating of the automotive stock is more than just financial numbers. It considers the leadership, and space-mission, of Tesla Motors’ CEO Elon Musk, as the reason behind its bullishness.

Morgan Stanley (NYSE:MS) adds further weight to its reason for rating the company higher than its current valuation. The investment the company has in research and development is another primary asset, which is expected to drive results in the near future.

Morgan Stanley also views the Model S Car as a ‘massive public laboratory experiment,’ with its real-time connectivity factors and constant monitoring. Additionally, Morgan Stanley has a unique customer relationship program, as it sells only through its own stores. This allows the carmaker to seek valuable feedback from customers and improve its products.

 Morgan Stanley (NYSE:MS) optimistic view of Tesla to break new records in auto making is definitely risk-ridden. Where the auto maker deploys technology as a key factor in improving the quality of its cars, the inherent risks in Tesla Motors Inc. (NASDAQ:TSLA), with its experiential products, could well see the 10x growth factor reverse, even falling by half!

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.

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