Tesla Model 3 an `Outright Challenge' to Big 3: Morgan Stanley
By Bailey Lipschultz
(Bloomberg) -- Tesla is “no longer a mere annoyance to incumbent auto players”, but an “outright challenge to the status quo,” Morgan Stanley analystAdam Jonas (equalweight, PT $305) writes in note to clients discussing Model 3.
Target for 500k units “may not be as much of a stretch” as once thought; rev. would roughly triple if reached Current Model 3 design will likely be the “most basic version you will ever see” Model 3 is a “big disruptor,” successful launch may be priced in to TSLA shares but doubts competitor prices are sufficiently discounted TSLA’s charging infrastructure offers a critical competitive advantage as its “cult following” could enter a new dimension
TSLA 8 buys, 11 holds, 6 sells; avg PT $310: Bloomberg data
(11:29:39 AM): *TESLA OUTLOOK STABLE BY MOODY'S
(11:29:45 AM): *MOODY'S ASSIGNS B2 CFR TO TESLA, B3 TO UNSECURED NOTES; OUTLOOK
(11:29:57 AM): The B2 CFR reflects Moody's expectation that the launch, production ramp up, and market acceptance of the Model 3 will be successful enough to achieve approximately 300,000 unit sales during 2018 (a full-year sales rate averaging about 5,500 per week) with a gross margin approximating 25%. This level of sales and profitability would enable Tesla to strengthen its performance from sizable losses to an operating position that supports the B2 CFR. The B2 rating is further supported by Moody's expectation than in the event of severe financial or operating stress, Tesla's brand name, production facilities, and product lineup would have considerable value to another automotive OEM or technology firm targeting the electric vehicle and mobility markets.
Who will lead the underwriting syndicate that will price the senior notes?