Tesla Just Had Its Stock Price Target Cut by Morgan Stanley. It’s a ‘WACC’ Problem.

Updated June 24, 2022 / Original June 22, 2022

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Morgan Stanley analyst Adam Jonas cut his Tesla price target Wednesday afternoon. He’s still a Bull, with a Buy-rating. And his target price only dropped $100, moving from $1,300 to $1,200.

It doesn’t seem like all that big a deal. Still, his report helps investor understand how the minds of Wall Street analysts work. The price decline is entirely because of an increase in the weighted average cost of capital—the cost companies pay to finance their business. It has nothing to do with how many cars Tesla is selling—or not selling.

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