Apple, Tesla’s new ‘bearish risk’, according to Morgan Stanley
Now Apple’s electric car returns to the scene with force
A day after the market learned that Apple (NASDAQ: AAPL ) is considering getting into the electric mobility business again, Tesla (NASDAQ: TSLA ) CEO Elon Musk said via Tweet that “During the toughest days of the Model 3 program, I contacted Tim Cook to negotiate the possibility of Apple buying from Tesla (at 1/10 of our current value). He refused to have a meeting with me. “
The news of Apple’s plans to become a possible rival of Tesla has not sat well either its CEO or, in view of it, its shares, which accumulated a 7% drop since Monday, coinciding with the implications that entails, with its entry into the S&P 500 . Uneven situation runs the apple company that yesterday closed with rises close to 3%.
The experts of Morgan Stanley (NYSE: MS ) assured that this information causes a “bearish risk” for Tesla. “Apple’s potential entry into the business would pose the greatest credible downside risk for Musk’s company,” said Adam Jonas, an analyst at the investment bank, on the situation, while maintaining his advice to buy Tesla, but with a price target of $ 540, that is, 15% below its current price.
A threat that could also be feasible in the case of other companies in the automotive industry such as General Motors (NYSE: GM ) or Ford (NYSE: F ), which would have a harder time competing if “Apple gets in their way,” he added. Jonas.
For providers of electrical, autonomous or connection systems, Apple’s plans could represent “a turning point in the speed and magnitude of a series of investments.” We have already seen it in the quotation of some of them, as is the case of Luminar Technologies or Velodyne Lidar.
Tesla, in a bubble if we take into account its evolution
“Although Tesla is a great company, it has strong signs of being overvalued,” Vitali Kalesnik, partner and head of research in Europe for Research Affiliates , told CNBC .
Kalesnik believes that the current price is too high considering its sales record, production numbers and other fundamentals. “When you take a look at the kinds of claims that others need to have to justify valuations of this kind, you realize that we would need, to justify Tesla’s price, very, very aggressive evidence,” he says, recalling that the Margins are “broadly on par” with the rest of the industry, meaning “the current valuation is in bubble territory.”