As Tesla's stock recovered some of its sizable losses earlier this week, a small survey by investment bank Morgan Stanley showed that more than two-thirds of the respondents believe that CEO Elon Musk's politics are affecting his company's performance. Tesla stock is down by 34.6% year-to-date and has trimmed back some of its losses today and yesterday after gaining 11.7% since Monday's bottom. The fresh buying in the stock comes after President Donald Trump's endorsement of Musk and announcement of treating acts of violence against Tesla cars as domestic terrorism. Musk has also sought to assuage investor concerns about low sales by promising to increase US production over the coming years.
Majority Of Respondents In Morgan Stanley's Survey Believe Tesla's 2025 Deliveries Will Drop Annually
Morgan Stanley's survey comes during a day that has seen a lot of analyst notes for Tesla. Guggenheim, Morgan Stanley, and Wolfe Research shared varying sentiments for the firm, with Guggenheim lowering Tesla's share price target from $170 to $175 and keeping a Sell rating earlier today. Wolfe Research remained neutral on the shares and kept a Peerperform rating, while Morgan Stanley, the permanent bull, kept its Overweight rating and a $430 share price target.
Morgan Stanley also released an investor survey earlier today which polled 245 participants in its distribution list yesterday about their sentiments about Tesla. Out of these, more than two-thirds or 85% believe that Musk's political actions are negatively impacting Tesla's business operations. 59% expect the firm's deliveries to drop in 2025, while 45% expect that the stock will close the year lower.
Among those surveyed, more than a fifth, or 21%, believe that Tesla's vehicle deliveries can drop by as much as 21% this year - which is nearly the same percentage (23%) of the participants expecting deliveries to stay flat.
Morgan Stanley's note, which kept a bullish outlook, was accompanied by Wolfe Research and Guggenheim's more tepid takes. Wolfe Research kept its Peerperform rating and noted that Tesla's shares are severely lagging behind the S&P 500's year-to-date performance. Despite today's 7.6% gain, the shares have lost nearly 35% year-to-date. The S&P, on the other hand, is down by 4%, while the NASDAQ Composite has lost 8%.
Wolfe Research believes that Tesla's first quarter will be driven by "launch costs, clear demand challenges, likely US policy changes, and battery supply constraints." It adds that there are few catalysts over the short term to drive the shares higher and believes that Tesla's assisted driving platform called Full Self Driving (FSD) and AI should drive the shares moving forward.
Over the long term, Wolfe believes that Tesla's Optimus robot and Robotaxi should help the firm. Its models suggest that Robotaxi could earn as much as $80 billion in revenue by 2035, while Optimus could become a meaningful contributor by 2026.
Guggenheim, on the other hand, is quite bearish. It cuts Tesla's first-quarter vehicle delivery estimate to 358,000 from an earlier 405,000. It adds that the headlines surrounding the firm are "likely get worse before they get better, with a negative 1Q delivery print, 1Q gross margin downside."
Guggenheim's 'early reads' on Tesla's Model Y refresh show that small anecdotes reveal tepid demand, driven by "wait times in China and the persistence of old Model Y inventory are both negative demand indicators." However, while the firm notes that 'Tesla Takeover' protests are gaining traction in the US and Europe, it adds that "Republicans buy EVs too, at almost the same rate as Democrats," which further complicates the situation surrounding the stock.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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