Morgan Stanley Makes Tesla Prediction For 2023, Cuts Price Target As Production Headwinds Linger

Morgan Stanley analysts cut their price target on Tesla Inc. TSLA stock following a delivery miss in the third quarter. 

What To Know: Morgan Stanley analyst Adam Jonas maintained Tesla with an Overweight rating on Monday and lowered the price target from $383 to $350, citing continued production headwinds.

"We believe factors that drove Tesla’s weaker than expected 3Q production and deliveries could continue to present headwinds into 4Q as well as into FY23," Morgan Stanley analysts wrote in a new note to clients.

See Also: Tesla Rebounds To Report Record Deliveries In Q3 As It Charts Course For Strong Finish To The Year

Tesla recently confirmed that it sold 343,830 vehicles in the third quarter, representing an approximate increase of 42.5% year-over-year. Most analysts expected quarterly deliveries of around 360,000.

Morgan Stanley analysts updated their forecast to reflect Tesla's delivery miss. Full-year deliveries are now expected to come in at around 1.31 million versus previous expectations of 1.37 million.

The Elon Musk-led company is now expected to deliver 1.8 million vehicles in the full-year 2023. That's down from expectations of 2 million. 

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Demand destruction is part of the problem. Morgan Stanley warned that such could be reflected in the months ahead by shorter lead times and price declines as EV consumers feel the effects of inflation. 

"Nevertheless, we believe Tesla will still sell every vehicle it can produce through the FY23 forecast," Morgan Stanley said.

Morgan Stanley's new price target sits at $350. The analyst firm also lowered its bull case price target to $500 and its bear case price target to $150. Jonas has a 58% accuracy rating, according to Benzinga's analyst ratings tool.

See Also: Tesla Model S Vs. Lucid Air: This Race Is A Photo Finish

TSLA Price Action: Tesla has a 52-week high of $414.50 and a 52-week low of $206.86. The stock was up 0.38% at $223.95 at time of publication, according to Benzinga Pro.

Photo: courtesy of Tesla.