Morgan Stanley's Adam Jonas Doesn't Want Investors To View Tesla As A Car Company

With Tesla Inc's TSLA share scaling the $300 barrier, Morgan Stanley issued a note in which it suggested the company is now more than a car company.

Analyst Adam Jonas said the sooner the investors should view the company as a transportation or infrastructure company, the more he believes the industry events to come over the next 12 to 18 months will make sense. He estimates the addressable markets within Tesla's ecosystem could include a $10 trillion light weight mobility market, a $1 trillion logistics market, a $2 trillion to $3 trillion energy market and a potential multi-trillion market captured in the 600 billion hours of consumer time spent in cars in the form of content delivery and data monetization.

"Our discussions with investors have revealed a far faster recognition of Tesla's place in the new transportation business model than we had anticipated", the analyst said.

Shares On a Solid Move Higher

Meanwhile, Jonas expressed surprise at the recent run up in the shares of Tesla, with technical power overriding fundamental drivers. The stock is inching towards the firm's $305 price target.

Tesla shares have been on a tear since late 2016, as it saw a precipitous ascent, which was interspersed by a pullback in February in response to its fourth quarter earnings results and comments issued on the earnings call. The most recent catalyst was a positive pre-announcement by the company made regarding first quarter deliveries, which helped the shares break above a September 2014 high and go over the $300 barrier for the first time ever.

Ahead of the production target-related bump, the stock got a shot in the arm from the news that Chinese Internet firm Tencent bought a 5 percent stake or 8.2 million shares of Tesla.

TSLA Source: Y Charts

Leaving GM, Ford Behind in Valuation

The rally has made Tesla the most valuable U.S. automaker, pipping past traditional car makers such as General Motors Company GM and Ford Motor Company F. As compared to Tesla's market capitalization, a metric obtained by multiplying the number of outstanding shares and the market price, of $53.07 billion, General Motors has a valuation of $51.49 billion and Ford's valuation is $45 billion.

Tesla is making waves and the imminent release of the mass market Model 3 vehicle could only increase its attractiveness.

Related Links:

Automakers Shift Lanes As Disruptive Technologies Take Over

Automakers' March Numbers Deflate Share Prices