It’s a bit too late to invest in Tesla Inc (NASDAQ: TSLA) now that the stock has nearly doubled already since the start of the year, Adam Jonas told clients on Friday.
Tesla shares need stronger catalysts
Interestingly, the Morgan Stanley analyst adhered to his “overweight” rating today but said Tesla shares need stronger catalysts to move further up from here.
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While we reiterate the overweight rating on Tesla shares, we believe the window of opportunity on valuation has closed. Further upside from here will require a more substantial narrative change following the March 1st Investor Day.
Tesla is expected to discuss its capital allocation strategy and the generation 3 platform on March 1st. It’s likely to unveil its “most advanced production line” and update on its long-term expansion plans as well.
Positives may already be priced in
Last month the EV giant reported record profit and revenue for its fiscal fourth quarter that Invezz posted HERE. Tesla shares have benefited this year also from a switch to a narrower rate hikes and China coming out of the COVID restrictions.
Still, Jonas warns the positives may just be priced in already and the stock could take a hit again if inflation and consequently the interest rates begin to climb again.
Adding over $350 billion of market cap this year closed the valuation case window on Tesla even faster than it opened.
The U.S. Bureau of Labour Statistics is scheduled to publish its monthly update on the consumer price index next week.