Tesla: shares rally for second day in row
(CercleFinance.com) - Tesla shares rallied for a second day running on Wednesday as Morgan Stanley upgraded its rating from "equal-weight" to "overweight.
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In a note to clients, the broker said it is "time to value Tesla's software and services business."
"Tesla is on the verge of a profound model shift from selling cars (volume x price) to generating high margin, recurring software and services revenue (platform users x ARPU)," the analyst wrote in the report.
Tesla currently offers a range of services to its drivers including autonomy, infotainment (traffic, video streaming, music services) and hosts other services such as supercharging, maintenance packages, and games, Morgan said.
"We believe it is only a matter of time before investors are provided with far greater levels of disclosure that can trigger a further re-rating of the equity," it added.
Morgan Stanley has also raised its target price for the share from 360 dollars to 540 dollars.
The shares were up almost 2% on Wednesday after these comments. They rose over 8% yesterday on the announcement the the share would be integrated into the S&P 500 index.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
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In a note to clients, the broker said it is "time to value Tesla's software and services business."
"Tesla is on the verge of a profound model shift from selling cars (volume x price) to generating high margin, recurring software and services revenue (platform users x ARPU)," the analyst wrote in the report.
Tesla currently offers a range of services to its drivers including autonomy, infotainment (traffic, video streaming, music services) and hosts other services such as supercharging, maintenance packages, and games, Morgan said.
"We believe it is only a matter of time before investors are provided with far greater levels of disclosure that can trigger a further re-rating of the equity," it added.
Morgan Stanley has also raised its target price for the share from 360 dollars to 540 dollars.
The shares were up almost 2% on Wednesday after these comments. They rose over 8% yesterday on the announcement the the share would be integrated into the S&P 500 index.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.