Tesla stock hit with Wall Street downgrade; What's next for TSLA?

Core Viewpoint - Tesla is experiencing renewed pressure as Morgan Stanley's Adam Jonas downgraded the stock rating from 'Overweight' to 'Equal-weight', while raising the price target from $410 to $425, indicating updated valuation models and long-term potential in emerging business lines [1][3]. Group 1: Stock Rating and Price Target - Morgan Stanley's Adam Jonas has lowered Tesla's stock rating from 'Overweight' to 'Equal-weight' [1]. - The price target for Tesla has been increased from $410 to $425, reflecting updated valuation models [1][3]. Group 2: Valuation Assessment - Jonas conducted a full reassessment of Tesla's sum-of-the-parts valuation, expanding beyond the vehicle segment [3]. - The revised model assigns value to the Optimus humanoid initiative and includes analysis on robotaxi deployment and Tesla's software-driven Network Services [3]. Group 3: Demand and Earnings Outlook - There is a weaker outlook for electric vehicle demand and Tesla's energy segment, which may impact near-term earnings expectations [4]. - Jonas notes potential dilution risks related to CEO Elon Musk's compensation structure [4]. Group 4: Long-term Catalysts and Valuation Range - Tesla is viewed as a global leader in electric vehicles, renewable energy, and AI, deserving a premium valuation, but high expectations for non-auto businesses have brought the stock closer to fair value [5]. - The valuation levels reflect major long-term catalysts, particularly in autonomy and humanoid robotics, with a broad valuation range from a bear case of $145 to an upside of $860, depending on Tesla's ability to scale robotaxis and deliver unsupervised autonomy [6].