A Morgan Stanley analyst has downgraded the stock of Tesla Inc. (NASDAQ:TSLA) despite the company’s impressive performance in the electric vehicle sector.

Morgan Stanley Cuts Tesla

Andrew Percoco, a new analyst at Morgan Stanley, has revised his recommendation for Tesla from “overweight” to “equal-weight.” He has also raised the price target to $425 from $410 per share, reported MarketWatch.

Despite Tesla's global strength in EVs, manufacturing, real-world AI, and clean energy, Percoco argues that the stock remains overpriced. He predicts a “choppy trading environment” for Tesla shares through the next year.

Percoco’s report acknowledges Tesla’s diverse business but suggests that the valuation metrics no longer justify a buy rating. He foresees a challenging period for Tesla’s shares until 2026, particularly in the electric vehicle sales sector.

Despite this, Percoco remains optimistic about Tesla’s ‘Full Self-Driving‘ product launch, ...