(NEW YORK) – Tesla’s future business value is now facing questions after Morgan Stanley downgraded the United States electric vehicle maker, saying the company’s stock price already reflects expected gains from its robotics and artificial intelligence plans.
The bank lowered Tesla to a rating similar to “hold” for the first time since June 2023. This has attracted attention from investors in South Sudan, who continue to monitor global technology markets that influence local investment appetite.
Tesla shares are currently trading at about 210 times their expected earnings for the next 12 months. This is the second most expensive level among companies in the S and P 500 index. Only Warner Brothers Discovery trades higher at 220 times. Palantir Technologies follows in third place at 186 times earnings.
A Morgan Stanley analyst, Andrew Percoco, said in a note to investors that Tesla offers more than vehicles, but the trading environment is likely to remain unstable next year. He said the market has already priced in Tesla’s growth in new areas such as robotics.
Percoco set a new price target for Tesla shares at 425 US Dollars. This means a possible drop of about 6.6 percent from the last closing price before the announcement. His view marks a shift from the bank’s previous long standing positive stance on Tesla.
The company’s shares fell by 3 percent on Monday to 441 US Dollars. Analysts across the market now rate Tesla more evenly, with 28 buy ratings, 19 hold ratings and 16 sell ratings.
Below is a summary of key figures and changes affecting investor sentiment:
| Item | Current figure | Notes |
|---|---|---|
| Share price (Monday) | 441 USD | Recently dropped 3 percent |
| New Price Target | 425 USD | Suggests 6.6 percent potential fall |
| Price to earnings ratio | 210 | Second highest in S and P 500 |
| Estimated value of Optimus robot project | 60 USD per share | Non vehicle business |
| EV sales forecast for North America | Down 12 percent | Expected next year |
Percoco noted that Tesla is promoting itself as a leader in advanced technology such as self driving systems and humanoid robots, including its Optimus robot project. However, falling electric vehicle demand could affect profit growth.
Tesla’s share price has been unstable in recent years. It has gained around 10 percent so far this year, following a 63 percent jump in 2024 and a 102 percent rise in 2023. By comparison, the S and P 500 index has gained more than 16 percent this year.
Industry data also shows weaker numbers in Europe. Tesla registrations there dropped by 36 percent in November, even while the wider European Union car market grew and electric car demand stayed strong.
