Tesla, Inc. (Nasdaq: TSLA) stock traded toward all-time highs today, closing at $270.22, just 5.9 percent below their high-water mark, observed on February 14. The seeming positive action coincided with a CNBC appearance by Adam Jonas, an analyst with Morgan Stanley (NYSE: MS), who, while lauding the firm's future, stated that Tesla's forecast of 430,000 Model 3 sales by 2018 was "too aggressive."
Before stating that he didn't believe that Tesla could make its 2018 Model 3 sales forecasts, he explained a belief that Tesla is morphing into something different than it currently is, a "transportation company," with the "vehicle machines" it is selling today acting as a financing scheme for "something much, much bigger." He sees this new future for Tesla taking advantage of this emerging identity, rather than selling "hundreds of thousands or millions of cars."
Future of Tesla not in car sales?
Instead of car sales, he sees the company chasing "hundreds of billions of miles," and the "600 billion hours that humanity spends inside cars." As Mr.
Jonas spoke, CNBC listed his conflicts, including Morgan Stanley owning a greater than 1 percent position, the firm undertaking investment banking with Tesla, and "other" conflicts. While the Morgan Stanley researcher doesn't see Tesla meeting sales targets, he does see the company meeting mileage targets, 18 months out.
Jonas explained how Tesla is installing a "liquid-cooled supercomputer" into each Model 3 with the hopes of gathering as much information as possible, to help continue its research into autonomous driving. Blasting News has reported on the decision of privately held Uber to suspend its testing of self-driving cars after a vehicle flipped over in Tempe, Arizona, last week.
The analyst described a 20 percent spike in traffic fatalities over the last two years, and attributed it to people using smartphones while driving, and to "human unlearning," explaining that people are "getting dumber."
Per share TSLA loss forecast for 2017
Elon Musk, Tesla chief executive officer, has stated that he would like to make Tesla vehicles "10 times" safer than they currently are. Adam Jonas thinks that if Musk is able to deliver safety "anywhere close to that," U.S. Congress, and the rest of the automakers, will have to "pay attention." He expressed a belief that such safety numbers would be enough to sway consumers, as well. So far, electric vehicles are said to make up less than 1 percent of the total industry.
Over the past 90 days, the Wall Street analyst consensus, calling for a per share TSLA loss of $0.62 in 2017, has been slashed to a loss of $1.42, as reported by Yahoo Finance. Over the same period, forecasts have been raised for 2018, from a per share profit of $1.35 to $2.48. Tesla last reported holding cash of $3.39 billion and owing $8.59 billion in debt. The Palo Alto, California employer of 17,782 reported a debt-to-equity ratio of 145.43 percent. Seventeen firms publish price targets for TSLA stock, ranging from $155 to $375, and averaging $250.94, roughly $20 below TSLA stock's 4 p.m. ET close.