Financial “Analysts” That Humiliate Themselves With Tesla Forecasts

Morgan Stanley’s Adam Jonas now has raised its main price for Tesla to $1050 per share. This is below the current $1450-1600 trading range for Tesla. Adam Jonas has a bull case of $2500. The $1050 case is based upon Tesla selling 3 million cars per year in 2030.

In December 2019, Morgan Stanley’s Adam Jonas said he sees Tesla selling 100,000 Cybertrucks by the end of 2024, at an average price of $50,000. Jonas believes Tesla’s Gigafactory in China could perform better than anticipated and reach a production rate of 450,000 units per year by 2024/2025.

In December 2019, Morgan Stanley’s “base case” price target of $250 a share remains unchanged, as well as its equal weight rating on Tesla. Morgan Stanley had a $10 “bear case” on Tesla.

Adam Jonas is constantly throwing out three wildly different numbers (Bear, primary and bull case). This Jonas publicly broadcasting his cluelessness. Tesla Shanghai is already producing over 4000 cars per week which is 200,000 cars on an annualized basis. Tesla Shanghai should comfortably reach 5000 cars per week in months or a 250,000 cars per week annualized basis.

Local sources predict that Giga Shanghai could more than double its current production rate by the end of 2020. This would put Shanghai production at 8000 per week or 400,000 cars per year on an annualized basis.

Tesla built the Shanghai factory in under one year and could scale production to 400,000 cars per year in less than one year. The production ramp will happen about 12 months after Jonas said it would take 48-60 months.

Jonas main case of $1050 is that Tesla will add three new gigafactories and ramp their production by 2030. Elon Musk and Tesla plan to complete Berlin, Texas and one other factory with 12-18 months. Tesla should then be able to nearly fully ramp production within 12-18 months based upon what has been shown in Shanghai. This would mean 3 million cars per year around 2022-2023 and not 2030.

Most other analysts have been setting price targets far below the actual share price of Tesla for several years.

SOURCES- Tesmanian, CNBC, Morgan Stanley
Written by Brian Wang, (Brian owns shares of Tesla)

22 thoughts on “Financial “Analysts” That Humiliate Themselves With Tesla Forecasts”

  1. Are there really 150 million people driving solo to work each morning in the US? Seems a bit overstated.

    Workers at my company start anytime between 7:30 and 10:00. One of my coworkers lives a block over from me, we could easily share a ride, and I’m pretty sure we could pick up at least one other person along the way. I think a taxi could give 10 people a ride to work each morning with little trouble.

    The ones who live hours away from work can still buy their own Tesla (he said nearly every car)

  2. Brian Wang is the greatest blogger since the Big Bang! I can’t understand why people who can’t spot obvious exponential trends are being paid insane amounts of money by these so-called investment banks. This Adam Jonas should be put in an accounting office, not “helping” people with stupid numbers he just pulled out of his excel spreadsheet which is based on flawed ideas.

  3. What do people think Tesla will do after it completes the factories it is currently building? Do they think it will sit on its laurels? Or do they think they will build a lot more factories at a faster and faster rate. Exponential growth will eat your lunch.
    Tesla stoppage point is a certain percentage of the consumer markets it decides to compete in. That percentage will depend on how they execute and how fast and strong their competitors responds to them. BTW, some of that market will explode in the next ten years.

  4. 15 million robo taxis taking every US worker to work at the same time? Are they sharing 10 to a vehicle?

    Or is this assuming that work from home will become the new normal, and even more common that today?

  5. Agreed if you keep getting it wrong then something is wrong with your model, Teslas stock price as I said is not the problem (I believe0, x % is just emotion.
    What is wrong is if above is correct
    Tesla built the Shanghai factory in under one year and could scale production to 400,000 cars per year in less than one year. The production ramp will happen about 12 months after Jonas said it would take 48-60 months.
    That`s 4 to 5 orders of magnitude off, if Tesla keep doing such things then .. somethings wrong, and the annalist must bend to the real world.

  6. Well, considering that 80% of the world’s population live in suburbs and rural areas, I don’t see robo-taxis taking over anytime soon. Manhattan is less than 3 million population out of 18 million metro New York. Uber and Lyft are just a tiny fraction of all car rides. I don’t see robo-taxis making much sense outside of dense city centers.

  7. Very well said. Amazon was way overvalued for 15 years, at least according to the ‘experts’. But some companies can’t be judged by traditional means.

  8. Robotaxis could eventually replace nearly every car on USA roads. This could happen with less than 15 million robotaxis and by 2025. The success of Tesla is now so substantial that Tesla could make it happen if they produce the necessary software. Tesla hardware is already up to scratch.
    Were Tesla to become so substantial, there would be demands for it to be broken up. Elsewhere I have already written that some such action should happen.

  9. Wouldn’t that make them Chrysler cars then? Or at least Chrysler cars with BMW level styling and appearance: Alfa Romeos.

  10. It seems to me that the analysts need to use the idea that Warren Buffett called “circle of competence”.

    Basically, if the share price is not following the analysis tools you have, you don’t just keep using those tools and keep getting it wrong.

    Instead, you say “This particular instrument is outside my circle of competence. It isn’t obeying the rules of the tools I have available, so I’m not going to give any guidance.”

  11. how comes articles like these are “sponsored content” ? Perhaps because this is the kool aid some fools with extra cash need? Sooner or later gravity will start working again, bulls beware.

  12. “The Tesla share price will eclipse $10,000 should Tesla own and operate millions of robotaxis.”

    Before or after they are broken up under anti-trust regulation?

  13. “Good point. They are making BMW cars for Ford prices.”

    Regretably with quality levels on par with Chrysler.

  14. QUOTE analysts cannot operate that way. A traditional fair value calc …UNQUOTE

    Which is a fair point but when do you abandon such ideas ? How many times do you have to be wrong?
    The Ark Invest premise is that we are living in a exponential 4th Industrial Revolution, when does enough evidence show this is true, not stock price driven by sentiment but hard physical evidence? .. this gives a totally different way of valuing a company like Tesla
    How long do you give real stock advice to real investors based on `Traditional fair value`?
    When is enough evidence enough .. saying `Rube is willing to pay` means what? That you KNOW that Tesla will not succeed (it may to be fair be currently overvalued) and note if Tesla do succeed i.e Self Driving / Energy it WILL be worth far more than its current price. Now no one can know but at least you can get (as Ark does) some A.I etc experts to assess this rather than P/E ratios.
    Annalists cant operate that way they are WORSE than useless on certain stocks (not all just some) you are effectively sending your highly trained runner into a swimming match, yeah its a race but everything is different.

  15. Weird how rubes keep beating the analysts on this stock. It’s almost like they’re seeing something the analysts don’t.

    Tesla is like Apple. People always used to say the next Android flagship was a “iPhone killer”, just as people keep talking up the next traditional automaker BEV as a “Tesla-killer”. Tesla has the best tech, but that isn’t even needed. They are a super-brand like Apple now. The brand itself is priceless.

  16. Most other analysts have been setting price targets far below the actual share price of Tesla for several years.

    The share price of a company may move based on magical thinking, but analysts cannot operate that way. 
    A traditional fair value calc for the optimistic case is still under $1k, the bear case is down around -90% from here. At the end of the day, something is worth whatever some rube is willing to pay for it.

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