Tesla(US:TSLA) Hua Er Jie Jian Wen·2025-04-24 06:52Core Insights - Tesla's Q1 2025 earnings report showed significant underperformance, with both profit and revenue falling short of Wall Street expectations, leading to a negative assessment from analysts [1][2] - Morgan Stanley remains optimistic about Tesla's long-term prospects despite recent challenges, maintaining a bullish rating and raising the target price significantly [1][4] Financial Performance - Tesla's Q1 total revenue decreased by 9% year-over-year to $19.3 billion, which was 3% lower than Morgan Stanley's forecast and 10% below Bloomberg's consensus [2][3] - The automotive business revenue fell by 20% year-over-year to $14 billion, marking a 30% decline compared to two years ago, the lowest quarterly revenue since Q3 2021 [2][3] - Free cash flow for Q1 was reported at $700 million, below expectations of $900 million and Bloomberg's forecast of $1.1 billion, attributed to higher-than-expected inventory levels [3] Analyst Ratings and Target Prices - Morgan Stanley downgraded its adjusted EPS forecast for 2025 from $2.11 to $1.59 and projected a free cash flow loss of approximately $300 million [4] - Morgan Stanley set a target price of $410, reflecting confidence in Tesla's market position and future growth potential [5] - Morgan Chase lowered its target price from $120 to $115, reiterating a "reduce" rating due to concerns over the company's growth narrative and fundamental deterioration [1][3] Long-term Outlook - Morgan Stanley emphasizes the importance of patience for investors, suggesting that the transition to revenue and cash flow from autonomous driving remains a key focus [5] - Analysts highlight that Tesla's core automotive gross margin, excluding ZEV credits, is at a 12-year low of 12.5%, indicating potential challenges ahead [4]