Morgan Stanley upgrades Tesla, sees software and services revenue as biggest value driver
Institutional investors and professional traders rely on The Fly to keep up-to-the-second on breaking news in the electric vehicle and clean energy space, as well as which stocks in these sectors that the best analysts on Wall Street are saying to buy and sell.
From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.
WATCH TESLA:
Morgan Stanley upgraded Tesla. The firm views Tesla as both an auto and tech company but sees the biggest value driver from here being its software and services revenue. “The same forces that have driven” Amazon Web Services to reach 70% of Amazon’s (AMZN) total EBIT can work at Tesla, “opening up new addressable markets that extend well beyond selling vehicles at a fixed price,” Morgan Stanley tells investors in a research note. The firm says Dojo, Tesla’s custom supercomputing effort in the works for the past five years, is the catalyst. Morgan Stanley believes Dojo can add up to $500B to Tesla’s enterprise value, expressed through a faster adoption rate in mobility and network services. This drives the firm’s price target increase, the upgrade, and Tesla becoming the analyst’s top pick, replacing Ferrari (RACE).
Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.
CHARGING STATIONS:
Tesla plans to install 20,000 EV charging stations across 2,0000 Hilton (HLT) properties in the U.S., Mexico and Canada beginning next year, CNBC’s Seema Mody reports. For Tesla, the buildout of wall connectors is another way to increase mass adoption by offering more convenient charging locations. For Hilton, it’s about meeting demand from leisure and business travelers, the author says.
CHINA ENTRY:
Without giving explicit details, a top executive of electric car company Lucid (LCID) told CNBC the company is exploring an entry into the China EV market, writes Arjun Kharpal for the news outlet. CNBC noted that the latest comments follow the hiring of Zhu Jiang, a former executive at Chinese electric car start-up Nio (NIO). “Every car manufacturer has to look very deeply or has already looked into China. It’s the world’s largest car market. It’s going to be likely the world’s largest and fastest adopting EV market as we can see,” Eric Bach, chief engineer at Lucid, told CNBC on Tuesday at the IAA auto show in Germany, according to the CNBC story.
ON THE SIDELINES:
RBC Capital initiated coverage of Lucid Group. Lucid’s technology is better than its nearest competitor Tesla based on an apples-to-apples comparison of efficiency and work by Munro & Associates, the firm tells investors in a research note. RBC says Lucid’s branded products are compelling but do not have enough traction and momentum to warrant much value today.
Earlier last week, Baird also started coverage of Lucid Group with a Neutral rating. The company produces luxury electric vehicles with “best-in-class technology” that enables higher range and better efficiency. However, high starting prices and a niche market segment create a challenging near-term setup for the shares, Baird tells investors in a research note. The firm looks for improved consumer health and progress in Lucid’s volume ramp to become more constructive.
POSITIVE SECULAR TRENDS:
RBC Capital initiated coverage of ChargePoint (CHPT). The company’s “robust” product portfolio, differentiated strategy, and asset-light business model position it to be a key beneficiary of positive secular trends in vehicle electrification and growing demand for charging infrascture, RBC tells investors in a research note. The firm says its positive outlook on the industry and favorable view of ChargePoint’s strategy are underpinned by its electric vehicle charging market analysis and associated charging infrastructure forecast.
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Originally Posted September 11, 2023 – What You Missed This Week in EVs and Clean Energy
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