A Morgan Stanley analyst offered some cautious commentary on Tesla on Wednesday morning. Here’s what the news means for mutual fund investors.
Inside the Commentary
Morgan Stanley analyst Adam Jonas commented on the declining oil prices impact on Tesla. He noted that the company’s Model S should not be impacted. However, TSLA’s Model 3 will likely be negatively impacted by lower oil prices.
The analyst expects TSLA to sell just 300,000 vehicles in 2020, which is well below TSLA’s estimate of 500,000.
Morgan Stanley has lowered its price target on TSLA from $320 to $290. This new price target suggests a 44% increase from the stock’s current price.
Declining Oil Prices Remove Selling Point for Tesla
The excitement over Tesla has been primarily due to high fuel costs. With gas prices declining, Tesla has lost its main selling point. It is notable to mention that Tesla trades at a rich multiple and is more for aggressive investors.
Mutual Funds to Watch
Investors seeking exposure to Tesla may consider a mutual fund investment. The funds below currently hold the largest stakes in Tesla.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| FCNTX | Fidelity® Contrafund® | 1.68% |
| VTSMX | Vanguard Total Stock Market Index | 1.64% |
| PRGFX | T. Rowe Price Growth Stock | 1.07% |
The Bottom Line
The funds listed above allow investors to gain exposure to a wide range of holdings. Investors interested in Tesla may also be interested in Toyota™ and Ford (F).
Shares of TSLA are up 35% YTD.