Morgan Stanley auto analyst Adam Jonas has released a new note summarizing investor sentiment on Tesla following a recent firm-hosted event (Q3 Preview, Feedback from Bull/Bear Lunch). According to Jonas, attendees expressed cautious expectations for Tesla’s upcoming Q3 and Q4 earnings reports, with uncertainty surrounding the company’s fiscal 2024 earnings growth potential.
Jonas notes there was minimal enthusiasm expressed regarding Cybertruck, Tesla’s upcoming pickup truck. Investors fear potential teething issues with the radical new model may exacerbate Tesla’s stale vehicle lineup if ramp is slow after delays. However, Jonas believes a Cybertruck production announcement during Q3 results could buoy Tesla’s stock.
Sentiment was also tepid around initiatives like Dojo and AI Day that lack easily quantifiable impacts. Jonas states these are “difficult to quantify, and easy to ignore” when building earnings projections, even if important strategically.
In summary, the meeting revealed considerable investor skepticism around Tesla’s near to medium-term trajectory according to Morgan Stanley. Cybertruck timelines, progress commercializing AI, and ability to sustain growth without demand levers like price cuts dominate the narrative.
Execution on marquee programs like Cybertruck, Tesla Dojo Supercomputer to Kick Off Production in 2023, and FSD will likely dictate future sentiment swings. If Tesla can accelerate these while maintaining profitability, institutional appetite may improve.
For now, Morgan Stanley’s interactions signal the analyst community remains cautious on Tesla’s next phase with slower growth expected. But Elon Musk has made exceeding conservative forecasts his specialty.
With Tesla, outlooks can change rapidly around catalysts. Once Cybertruck nears reality or FSD reaches new milestones, ESG obstacles like Fremont grandfathering get resolved, or 4680 cell ramp enables more profitability per vehicle, bearish projections could turn bullish. Sentiment follows execution.