According to a Morgan Stanley (NYSE:$MS) analyst, Tesla (NASDAQ:$TSLA) shareholders are in for a bumpy ride in 2018.
Morgan Stanley echoed its equal weight rating for the auto manufacturer’s shares, forecasting that the stock will rise and then fall next year.
On Tuesday, analyst Adam Jonas wrote a note to clients titled “Tesla 2018: $400 then $200?” In the note, Jonas noted that Morgan Stanley expects Tesla shares “to be extremely volatile in 2018, divided into two stages: (1) The alleviation of production bottlenecks with strong cash inflow, and (2) mounting concerns over the sustainability of the competitive moat.”
Jonas echoed his $379 price target for shares of Tesla, which represents a 23% upside to Monday’s close.
“We believe such upside [to the firm’s price target] is less interesting on a risk-adjusted basis. From a shorter-term trading perspective, we anticipate Tesla’s stock price may reach highs in the range of $400 or more over the next few months before facing some more serious headwinds later in the year,” the analyst wrote.
Jonas forecasts Tesla will fix its battery output issues in the approaching weeks as the Palo Alto, California-based company put more resources on the issue. That said, Jonas also forecasts that more electric car announcements from direct rivals in 2018 will hurt investor sentiment significantly.
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