Summary
– Morgan Stanley analyst reiterates “Overweight” rating and $310 per share price target for Tesla
– Recent rescinding of Elon Musk’s 2018 CEO Performance Award led to vote on 2018 compensation plan at 2024 Annual Stockholders’ Meeting
– Analyst notes importance of June 13th shareholder vote for long-term strategic direction of Tesla
– Majority of survey respondents expect approval of Elon Musk’s compensation package
– If approved, majority expect Tesla stock price to react positively over the next three trading days
Article
Morgan Stanley analyst Adam Jonas has reiterated his “Overweight” rating and $310 per share price target for Tesla, discussing the upcoming 2024 Annual Stockholders’ Meeting and the potential results of the vote on Elon Musk’s 2018 compensation plan. Earlier this year, a Delaware Judge rescinded Musk’s 2018 CEO Performance Award, leading Tesla to ask its shareholders to ratify the compensation plan at the upcoming meeting. The company has been encouraging shareholders to vote in favor of Musk’s pay plan as well as Tesla’s relocation to Texas.
The analyst noted that Elon Musk likely needs Tesla more than ever amidst the emerging AI industry and that TSLA stock could see volatility due to the upcoming shareholder vote on Musk’s compensation plan. Morgan Stanley conducted a survey among investors, with the majority of respondents indicating that they expect approval of Musk’s compensation package. If approved, respondents anticipate a positive reaction in Tesla stock price over the next three trading days. However, if the compensation package is not approved, respondents expect the stock price to decrease significantly.
Based on the survey results, 57% of respondents expect Elon Musk’s compensation package to be approved, outnumbering those who do not expect approval by more than 2:1. If the compensation package is approved, 68% of respondents expect Tesla stock price to react positively over the next three trading days, with 24% expecting shares to increase by 6-10% and 44% expecting an increase of 3-5%. In the event that the compensation package is not approved, the majority of respondents anticipate a decrease in stock price, with 54% expecting a significant decrease of 6-10% or more.
The significance of the June 13th shareholder vote was emphasized by the analyst, highlighting its importance for the long-term strategic direction of the company. With the broader collection of Elon Musk’s businesses potentially investing significant amounts in AI infrastructure in the coming years, the cost of capital is seen as crucial for AI supremacy. The survey conducted by Morgan Stanley provided valuable insights into investor expectations regarding the approval of Musk’s compensation plan and its potential impact on Tesla’s stock price.
Overall, Morgan Stanley’s analysis and survey results suggest that Tesla investors are likely to vote in favor of ratifying Elon Musk’s 2018 compensation plan at the upcoming Annual Stockholders’ Meeting. The approval of the compensation package is expected to have a positive impact on Tesla’s stock price, with the majority of respondents anticipating a favorable reaction in the market. The analyst’s comments underscore the importance of the shareholder vote for the company’s future strategic direction and Elon Musk’s continued leadership amid the growing significance of AI technology in the industry.
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