The shares of Tesla Motors Inc (NASDAQ:TSLA) jumped nearly 3 percent after Morgan Stanley (NYSE:MS) analysts called it the right time for buying the electric motor company’s shares. In addition to it, the electric motor company is facing difficult times in the Chinese markets, as China reports its slowest growth rate in the last 25 years.
Adam Jones, analyst for Morgan Stanley, reduced the price target for the electric automaker at $280 while calling it the right level of balance with the current trading prices. At the same time, Jones said that the analyst panel at Morgan Stanley (NYSE:MS) was a bit worried with the higher trading prices few months ago.
Jones said, “I mean, we fundamentally think there’s a fair value support at the $280 level, but we felt some of the arguments that investors and analysts were making (as this is going to be a democratizing model event to kind of bringing these to the masses), we think were really out of balance. Now here at $190 or $200? A much better level of balance in the debate.”
Upon being asked about the impact of falling oil prices on Tesla Motors Inc (NASDAQ:TSLA), Jones said that if the company sticks to its $100,000 models, its sales will not have any effect of the falling oil prices. However, it is likely to influence the forward year outlook of the electric carmaker. In addition to it, falling oil prices might affect the mass-market models of the company in the upcoming years.
One of the major problems that Tesla Motors Inc (NASDAQ:TSLA) is facing as of now is the dropping sales in China. The Chinese economy registered its slowest growth year in 2014 with growth rate of 7.4 percent. In addition to it, the company would have to offer sufficient charging infrastructure in China to support its sales. The company has 23 Supercharger stations in China against 124 in the U.S. and 82 in Europe.
This article has been written by Prakash Pandey.