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Tesla Aviation? Morgan Stanley says yes, and it could be worth $1,000 per share

Credit: SpaceX

Published

4 years ago

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Tesla (NASDAQ: TSLA) has already changed the automotive industry for the better through its development of industry-leading electric cars. However, the company’s work is far from over. While the automaker is still trying to figure out the next revolutionary breakthrough in EV development, the analysts at Morgan Stanley believe that Tesla will eventually expand its product line to aviation products. It could be worth big gains in the long run for shareholders.

In a note released earlier today, a team of Morgan Stanley analysts led by Adam Jonas brought along their thoughts for Tesla Aviation. Although Tesla is still working on EV development, Morgan Stanley made it clear that their expectations for the company are to eventually expand to aviation, working toward sustainable transportation in the air and not just the ground.

“In our view, the chance that Tesla does not ultimately offer products and services to the eVTOL/UAM (Electric Vertical Take-Off and Landing, and Urban Air Mobility) market is remote,” the note said. “The potential skills transferability and network adjacencies are too strong to ignore.”

Now while CEO Elon Musk has not specifically mentioned that Tesla will be involved in the development of all-electric air transport, he has hinted in the past that there should be more sustainable options for aviation. In October 2020, Musk Tweeted, “There should be a new supersonic jet, this time electric.”

While speculation persists that Tesla could be involved in the eventual development of these products, the company has never explicitly commented on their involvement in the possibility. In all honesty, though, what company would be better suited to develop these types of products?

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Morgan Stanley agrees with this assessment, indicating that the company’s potential in the e-aviation sector would be monumental. While companies in the aviation sector have been mentioned in the past, Tesla is being left out of this conversation. Why? “Quite simply, it is because Elon Musk hasn’t really talked about it. In fact, he’s barely mentioned it.”

The team of analysts at the Wall Street-based firm also mention that Musk has been dismissive of the “flying car genre” because “advancing the state of 3-dimensional transport via tunnels or space” is the prioritized task at the moment. But this could ultimately change down the road, Morgan Stanley says, by 2050. “We’ll have Teslas on our roads, underground in tunnels…on Mars. But not in Earth’s skies? Well…we’re not convinced.”

“We have run a range of scenarios flexing market share and EBITDA margin assumptions based on our global eVTOL/UAM model (a $9tn TAM by 2050…yes….2050). Discounted back to the present on a per-share basis, we’re coming up with potential preliminary outcomes on the order of $100 per Tesla share on the low-end to approximately $1,000 per Tesla share (or more) on the high end,” the note said. The current $900 price target the firm has for Tesla does not include its potential participation in the aviation sector.

Tesla plans to bring some “flying” products to the market soon, especially with the Roadster that Musk has planned to install a SpaceX package to allow short-term hovering. Purely speculative by Morgan Stanley, their predictions of a Tesla aviation business are lofty. Still, it’s not completely out of the question that the company could eventually expand its expertise into other sectors that have to do with transportation.

Disclosure: Joey Klender is a TSLA Shareholder.

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Don’t hesitate to contact us with tips! Email us at tips@teslarati.com, or you can email me directly at joey@teslarati.com.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Shark Tank’s O’Leary roasts Tim Walz over Tesla stock hate session

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1 day ago

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March 21, 2025

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Shark Tank personality and legendary investor Kevin O’Leary roasted former Vice Presidential nominee Tim Walz over his comments regarding Tesla shares earlier this week.

Walz, a Minnesota Democrat, said that he recently added Tesla (NASDAQ: TSLA) to his Apple Stocks app so he could watch shares fall as they have encountered plenty of resistance in 2025 so far. He said that anytime he needs a boost, he looks at Tesla shares, which are down 36 percent so far this year:

Walz, among many others, has been critical of Tesla and Elon Musk, especially as the CEO has helped eliminate excess government spending through the Department of Government Efficiency (DOGE).

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However, Kevin O’Leary, a legendary investor, showed up on CNN after Walz’s comments to give him a bit of a reality check. O’Leary essentially called Walz out of touch for what he said about Tesla shares, especially considering Tesla made up a good portion of the Minnesota Retirement Fund.

As of June 2024, the pension fund held 1.6 million shares of Tesla stock worth over $319.6 million:

O’Leary continued to slam Walz for his comments:

“That poor guy didn’t check his portfolio and his own pension plan for the state. It’s beyond stupid what he did. What’s the matter with that guy? He doesn’t check the well-being of his own constituents.”

He even called Walz “a bozo” for what he said.

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Of course, Walz’s comments are expected considering Musk’s support for the Trump Administration, as the Tesla CEO was a major contributor to the 45th President’s campaign for his second term.

However, it seems extremely out of touch that Walz made these comments without realizing the drop was potentially hurting his fund. While we don’t know if the fund has sold its entire Tesla holdings since June, as a newer, more recent report has not been released yet, it seems unlikely the automaker’s shares are not still making up some portion of the fund.

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Elon Musk

Tesla gets an upgrade on ‘upcoming material catalysts’

Published

3 days ago

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March 19, 2025

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tesla model y in white
(Source: Tesla)

Tesla (NASDAQ: TSLA) received an upgraded rating on its shares from Wall Street firm Cantor Fitzgerald, who recently took a trip to Austin to visit the company’s data centers and production lines ahead of several high-profile product launches set for this year.

It was a bold move, especially considering Tesla shares are under immense pressure currently, fending off negative news regarding the company’s sentiment and potentially lower-than-expected delivery figures due to the launch of a new version of its most popular vehicle, the Model Y.

However, the bulls on Wall Street are still considering Tesla to be a safe play, especially considering its robust presence in various industries, including automotive, energy, and AI/Robotics.

Cantor Fitzgerald analyst Andres Sheppard said in a note that, during a recent visit to Tesla’s Cortex AI data centers and the production line at Gigafactory Texas, it was clear there is a lot of potential and runway for Tesla in 2025:

“On 3/18, we visited Tesla’s Cortex AI data centers and the factory’s production lines ahead of the company’s introduction of its Robotaxi segment (targeted for June in Austin, followed by CA later in 2025). With Tesla’s shares now down ~45% YRD, we upgrade Tesla to Overweight (from Neutral) ahead of upcoming material catalysts. Our $425 12-month PT is unchanged. Our Thoughts: Attractive Entry Point Ahead of Material Catalysts.”

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Sheppard went on to mention the catalysts, which he believes are the Robotaxi rollout in Austin in June, along with the continued rollout of Full Self-Driving in China, the eventual rollout of FSD in Europe, and the introduction of the affordable models in the first half of this year, and those were just on the automotive side.

There are several others, including Optimus, growth in the energy division, and in the longer term, the Semi.

In terms of potential weaknesses, Sheppard expects the likely removal of the EV tax credit and some of its growth to be offset by tariffs as the two big things that stand in the way of even more growth for the company.

Tesla is up over 5 percent on Wednesday, trading at $236.86.

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Investor's Corner

Tesla stock surges on Wednesday, but there’s still more room to go

Published

1 week ago

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March 12, 2025

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Credit: Tesla

Tesla stock (NASDAQ: TSLA) surged over 7 percent on Wednesday, canceling out some of the losses it has felt this week.

It has been a less-than-ideal start for Tesla in 2025, as the company has wiped out all of its gains felt from the victorious election campaign of President Donald Trump. The stock is down 34 percent so far this year.

The losses have mostly been felt due to reports of decreased demand due to pushback against CEO Elon Musk and his support of President Trump, as well as investor concern over the CEO’s personal use of time between the Department of Government Efficiency (DOGE) and Tesla itself.

In a note this week from Wedbush, analyst Dan Ives wrote:

“Musk needs to step up as Tesla CEO at this critical juncture. In a nutshell, the word ‘balance’ has been missing with Elon Musk and his ability to run Tesla as CEO….while instead focusing all of his energy and time driving his DOGE initiative within the Trump Administration. Since Trump’s White House 2nd term kicked off in January, we have seen Musk and Trump connected at the hip with Musk essentially living at the White House and Mar-a-Lago in Palm Beach. There has been little to no sign of Musk at any Tesla factory or manufacturing facility the last two months and perception has become reality for Tesla shares. Trump getting elected President was a huge moment for Musk and Tesla in our view as this will create the fast track for an autonomous federal roadmap…however the DOGE efforts have now intertwined Tesla into this brewing political firestorm.”

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Wednesday’s slight bump for Tesla shares is likely related to the support the company received from President Trump yesterday, who purchased a Model S sedan at the White House and pledged to pay for it with a check.

President Donald Trump buys a Tesla at the White House – Here’s which model he chose

The move was one that signaled a buying spree from high-profile Republicans, including Sean Hannity, among others, who announced their support for Musk and Tesla:

Tesla shares closed at $248.09 on Wednesday, up 7.59%.

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