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Even one of the most bullish Tesla analysts is running scared

Fred Imbert

Morgan Stanley's Adam Jonas, one of the most bullish Tesla Motors (TSLA) analysts, had a change of heart on the stock Thursday.

Jonas slashed his price target on the stock to $245 from $333 and downgraded it to "equal weight" from "overweight," citing the company's proposed acquisition of SolarCity (SCTY).

"Given the uncertainty as to whether TSLA and SCTY shareholders will approve the proposal, we have not made changes to our operational assumptions, and have not, at this stage, modeled in an acquisition of SCTY," Jonas said in a Thursday note to clients.

Tesla said Tuesday after the close it would bid $2.8 billion for SolarCity, sending both stocks on diverging paths. Tesla shares fell sharply Wednesday, while SolarCity's stock soared .

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Tesla shares slipped to $196.40 on Thursday.

Analysts at Morgan Stanley also downgraded SolarCity's stock to "equal weight" from "overweight" and cut their price target to $24 from $34.

"We still see upside to our [discounted cash flow]-driven price target and the potential acquisition price … However deal approval is uncertain and we see several fundamental risks that could be magnified should the deal not close," Morgan Stanley said in a Thursday note.

SolarCity's stock was slightly higher at $21.98.

Over the past year SolarCity's stock has plunged more than 62 percent, while Tesla's has shed 26 percent.

TSLA (blue)/SCTY (green) 12-month chart

Source: FactSet

Disclosure: Morgan Stanley owns 1 percent or more of Tesla and SolarCity stock.



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