/ December 8, 2025 A significant shift in sentiment has emerged from one of Tesla’s most prominent Wall Street supporters. After more than two years of bullish advocacy, analysts at Morgan Stanley have downgraded the electric vehicle maker’s stock, signaling that its current price leaves little room for error. The move underscores a growing tension between Tesla’s undeniable technological leadership and its stretched market valuation. A Changed Rating Reflects New Caution Lead analyst Andrew Percoco has revised the firm’s recommendation on Tesla shares from “Overweight” to “Equal Weight.” While he concurrently raised the price target to $425, this adjustment implies minimal upside from recent trading levels. The core rationale is straightforward: the market has already priced in lofty expectations for the company’s artificial intelligence and renewable energy ventures, leaving shares vulnerable to any disappointment. Percoco’s detailed assessment highlights substantial concerns regarding key valuation metrics. The stock currently trades at approximately 30 times the estimated EBITDA for 2030, a premium that offers investors scant margin for safety. A more skeptical view of the core automotive business drove a portion of the revised outlook. Morgan Stanley now values this segment at just $55 per share, citing an anticipated slowdown in electric vehicle adoption and intensifying competition. The bank forecasts vehicle deliveries will reach 1.6 million units in 2026.