Morgan Stanley Names Tesla Top Pick in Auto Sector

Morgan Stanley has named Tesla its 'Top Pick' in the U.S. automotive sector, highlighting significant improvements in cost-cutting and restructuring measures that have mitigated risks and supported the company's financial performance. Analyst Adam Jonas set a price target of $310 for Tesla shares, indicating a potential 40% upside, while noting that Tesla's energy business could surpass its auto business in value. Tesla recognized approximately $2,000 per unit in zero-emission vehicle credit revenue, positioning it to dominate this market as traditional automakers scale back their EV plans. Despite this bullish outlook, Tesla reported its lowest profit margins in over five years and missed earnings targets due to heavy vehicle discounts to boost demand. The company is also facing scrutiny over its autonomous driving technology and has postponed its robotaxi launch event to October. As Tesla's stock rebounded nearly 6% following the announcement, Ford's shares fell, reflecting the competitive pressures in the EV market.