Here's Why Morgan Stanley Bumped Up Tesla's Price Target By 33%

Morgan Stanley analyst Adam Jonas raised the price target on Tesla Inc TSLA to $1,200 from $900, implying a 32% upside, and reiterated an Overweight rating on the shares following better than expected Q3 results.
Tesla over the next 12 months can demonstrate its manufacturing leadership, a "step change in costs/complexity and higher growth in the vehicle user base," Jonas notes.
The $1,200 target implies roughly half the company's growth target, a "constrained" China and virtually no autonomy, says the analyst.
Jonas notes that the target raise is driven predominantly by higher volume assumptions.
His revised volume forecast of 8.1M units by 2030 implies an annual growth rate of 28%, slightly more than half the 50% growth rate targeted by Tesla over the long term.
Jonas said that Tesla Q3 sales surged by approximately 70% according to his calculations, even though global automobile production fell by about 20%.
Beyond vehicle sales, Tesla's software business and tech in areas like insurance and battery supply would allow it to become a "champion," added Jonas.
Price Action: TSLA shares traded higher by 2.62% at $933.50 premarket on the last check Monday.