Morgan Stanley’s disappointed analyst sets new Tesla (TSLA) share price

With the share price of electric vehicle manufacturer Tesla (NASDAQ: TSLA) reacting negatively to the Robotaxi event, analysts continue to share their opinions about the equity’s outlook.

During the event, Tesla debuted the long-anticipated prototypes for its Cybercab and Robovan, with concerns mainly stemming from a lack of details about the products. 

As a result, TSLA ended the October 11 trading session, dropping 9% for the day to trade at $217. Indeed, the momentum has seen the equity reverse its year-to-date gains, plunging back into the negative zone with a drop of 12% in 2024. 

Now, Morgan Stanley’s (NYSE: MS) Adam Jonas, in a note on October 11, expressed dissatisfaction with the event’s lack of detail on key artificial intelligence (AI) and autonomous driving initiatives. Before the event, Tesla was touted among the underrated AI stocks.

Jonas noted that the event fell short of providing the substantial updates that investors and analysts were eagerly anticipating, such as the progress of Full Self-Driving (FSD) technology, the company’s autonomous ridesharing roadmap, and the broader strategic relationship between Tesla and xAI, Elon Musk’s AI venture.

The event did include some updates, including test drives of the Cbercabs and additional details on Optimus, the humanoid robot Tesla is developing. Musk stated that the Texas-based company intends to roll out the Cybercabs “before 2027” but failed to offer specific timelines.

However, Jonas commented that these demonstrations did not delve deep enough into the metrics and deployment timelines analysts hoped to see.

“Disappointing lack of detail. Heading into the ‘We, Robot’ event, we had high expectations for Tesla to advance its AI narrative with updates on FSD improvements and a clear go-to-market strategy,” Jonas said. 

This muted reception of Tesla’s announcements has led Morgan Stanley to anticipate some pressure on TSLA stock in the near term. Jonas warned that the company’s failure to provide concrete timelines or quantifiable progress in these areas could temper investor enthusiasm. In the meantime, Morgan Stanley has maintained its ‘Overweight’ rating on the stock but set a revised price target at $310.

More analysts concerned after Robotaxi 

Despite showcasing the Optimus humanoid robot and the Cybercab, analysts seem to be most concerned about Tesla’s lack of updates on its FSD system and the absence of a more affordable consumer vehicle. Goldman Sachs (NYSE: GS) shared this concern, maintaining a ‘Neutral’ rating with a price target of $230.

On the other hand, Piper Sandler kept an ‘Overweight’ rating with a target of $310, acknowledging that the event was visually appealing but lacking concrete deliverables. Analyst Alexander Potter suggested that trading momentum might cool as unmet expectations weigh on the stock.

With an ‘Underweight’ rating and a price target of $120, Wells Fargo (NYSE: WFC) referred to the event as heavy on presentation but light on substance, pointing out the absence of regulatory timelines for FSD and specific cost projections.

However, Bank of America’s (NYSE: BAC) Justin Post noted that the event met expectations, sharing a ‘Buy’ rating with a price target of $255. In the long term, some experts, such as Dan Ives of Wedbush, believe that Tesla’s new products will elevate the company to a $1 trillion valuation.

TSLA stock technical outlook 

Meanwhile, when looking at the short-term price target, one of the targets remains the $300 spot, backed by a stock analyst with the pseudonym Market Maestro. Although Robotaxi was dubbed a disaster, trading expert Trading Shot noted that the equity still has room to recover to a target of $380.

On the flip side, a stock market analyst with the pseudonym Pavlos D, in an X post on October 12, stated that Tesla finds itself at a critical juncture as its stock price nears a significant ascending trendline, which has acted as support since late May. 

Indeed, the drop during the latest trading session intensified these concerns. At the moment, TSLA has support at $210 and $204, with the trendline hovering nearby, serving as a crucial test for the stock.

The expert opined that a breakdown below this trendline could signal a bearish trend, potentially pushing TSLA toward further downside targets around $192 and $182, marked by historical support levels. However, if buyers step in, TSLA could see a rebound toward resistance levels near $234, $252, and $270.

In summary, Tesla’s Robotaxi event has raised concerns about the company’s direction and future product timelines. The mixed responses fuel further uncertainty and the EV maker needs to address them and reassure investors about the future.