This article first appeared on GuruFocus.
Tesla (NASDAQ:TSLA) slid about 1.5% in premarket trading after Morgan Stanley moved the stock to the sidelines.
Analyst Andrew Percoco, who recently took over coverage, downgraded Tesla from Overweight to Equal-weight while raising his 12-month price target to $425 from $410.
Percoco acknowledged Tesla’s leadership across electric vehicles, energy and real-world AI but said much of those gains appear priced into the shares.He flagged a choppy trading environment through 2026 and trimmed near-term auto volume expectations, arguing execution risk remains a key driver.
The analyst’s refreshed sum-of-the-parts model assigns value to Tesla’s Optimus humanoid and its network services, but still leaves limited near-term upside at current levels.
Some investors reacted to the note as momentum quickly cooled following a strong rally earlier this year.While Morgan Stanley sees long-term optionality in robotaxis and FSD, Percoco advised waiting for a better entry point rather than chasing recent gains.