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Tesla Upgraded by Morningstar

The increased fair value estimate for Tesla comes from our expectations of higher profitability in the wider sector

Seth Goldstein 01.07.2021
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Tesla vehicle

 

After taking a fresh look at Tesla (TSLA), we are raising our fair value estimate to $550 per share from $354. The increased fair value estimate comes from our outlook for higher long-term profitability in the automotive segment. We maintain our narrow moat rating but downgrade our moat trend rating to stable from positive. The rating change comes from our view for offsetting trends over the next five years. We see Tesla's brand-related intangible asset moat source strengthening but see this being offset by a weakening cost advantage. While we think Tesla will continue to drive down its own supply costs, other automakers' EV unit production costs should fall by a larger dollar amount, albeit from a much higher starting point.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Tesla Inc687.20 USD1.45Rating

About Author

Seth Goldstein

Seth Goldstein  Seth Goldstein, CFA, is an equity analyst for Morningstar

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