Tesla deliveries, margin estimates trimmed at Morgan Stanley
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Morgan Stanley analyst Adam Jonas reined in his price target for Tesla (NASDAQ:TSLA) on Wednesday as softness in China and added costs augment expectations.
Jonas updated his forecast for deliveries to 270k units for the second quarter versus 316k units under previous expectations, taking the full year targets down to 1.39M from 1.425M. Additionally, auto gross margin estimates for the second quarter were reeled in to 24.6% from the prior estimate of 25.8%. For the full year, that metric is expected to hit 26.5%, just below the 26.8% anticipated previously. 
âWe mark to market our [second quarter] forecasts for lower volume (latest data, China) with most of the shortfall made up for in [second half] volume and higher pricing,â he wrote in an update note. âTarget falls to $1,200 (vs. $1,300) almost entirely due to WACC increasing to 9% from 8.5% previously.â
Despite the estimate trimming, Jonasâ $1,200 price target remains well above the levels tread by the stock in recent months. As such, he advised that Tesla (TSLA) presents an attractive âbuy on weaknessâ opportunity if its second quarter print comes in softer than expected and leads to a further selloff.
Read more on stop and go production plans at Teslaâs Shanghai factory.